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Commodities Briefing 11.Jun 2013

Posted on 11 June 2013 by VRS |  Email |Print

Global temperatures are on track to rise by more than double the two-degree Celsius (3.6-degree Fahrenheit) warming goal set by the UN unless urgent measures are taken, the International Energy Agency warned on Monday.
“The path we are currently on is more likely to result in a temperature increase of between 3.6 and 5.3 C (6.5-9.5F),” IEA chief Maria van der Hoeven said in presenting a new report on greenhouse gases. The Paris-based agency urged governments to act, saying the 2C target could still be met with little economic pain………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

The International Energy Agency (IEA) says the world’s carbon dioxide emissions from fossil fuel usage have risen to a record level. It warns that despite increased renewables usage climate change will “not go away.”
Global carbon dioxide emissions hit a new record in 2012, standing at 31.6 billion tons, the IEA reported Monday. The agency said the energy sector accounts for about two-thirds of global emissions of CO2 and other greenhouse gases, which scientists say are fueling climate change………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

The European Union needs to think of other ways to prevent new coal-fired power stations from being built because its carbon market won’t achieve that this decade, according to the International Energy Agency.
Nations should consider measures including bans of new and inefficient plants known as “sub-critical,” unless they are fitted with carbon capture and storage technology, Maria Van der Hoeven, the executive director of the Paris-based agency that advises 28 developed nations, said………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

A sticking plaster solution for climate change has been proposed by the world’s top energy think tank, the International Energy Agency (IEA). It says climate change could pass a critical level if the world waits until 2020 for the planned comprehensive UN deal to cut emissions.
In the meantime, it recommends some short-term measures. These include action on energy efficiency, coal-fired power stations, and fossil fuel subsidies………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Technological advances to harness shale resources will curb OPEC’s influence in the oil market and cap prices at $120 a barrel, said Nansen Saleri, former head of reservoir management at Saudi Arabian Oil Co.
The boom in North American oil output could be replicated in Russia, China and Brazil as new extraction techniques enable the development of as much as 9 trillion barrels in unconventional reserves, said Saleri, who is now chief executive officer of Houston-based Quantum Reservoir Impact………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Platts, the price reporting agency involved in a European investigation into potential manipulation of oil prices, has launched a strong attack on Brussels, saying European regulators are conducting their probe in an opaque way.
Jorge Montepeque, Platts global head of price reporting, told an oil industry conference in Kuala Lumpur that the European Commission had not provided the price reporting agency with any details about alleged manipulation………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

If you follow energy closely, you’ve likely lost count of the number of times you’ve heard an economist, executive or government official explain that oil prices are set by the global market, and not by oil companies or the US government. Although somewhat over-simplified, this statement has been valid for roughly 30 years.
However, it hasn’t always been the case. Current trends in US production, together with existing regulations, make me wonder if it will remain accurate in the future, as the US inches closer to what is commonly referred to as energy independence………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Hedge funds increased wagers on a gold rally to the highest in seven weeks before a report showing the U.S. added more jobs than forecast spurred the biggest retreat in prices since April.
Speculators raised their net-long position by 19 percent to 57,113 futures and options by June 4, U.S. Commodity Futures Trading Commission data show. The holdings surged 60 percent in two weeks, the most since March, as short bets contracted. Net-bullish wagers across 18 U.S.-traded commodities slid 3.3 percent as investors became more bearish on sugar and coffee………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

A now-familiar falter-at-the-alter saw gold prices once again give away their mid-week gains before the markets closed for the week last Friday, with spot gold price retreating to below $1,400 per troy ounce again. That marked the fourth time in as many sessions that gold assiduously clawed its way up the elusive Mt $1,400 peak, only to slide back under profit-pressures.
It’s been really disappointing for the avid gold bull to see the once-mighty precious metal fail miserably to climb above a level that’s more than a quarter less than its highest ever level, of $1,923/oz that it cracked in September 2011………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Gold’s recovery to a three-week high last week is over and prices that entered a bear market in April may fall another 5.5 percent to about $1,303 an ounce, according to technical analysis by UBS AG.
The $1,303 level would be the 50 percent retracement of bullion’s rally from October 2008 to its record in 2011, one of the levels singled out in so-called Fibonacci analysis. A “cross lower” in Stochastic momentum indicators would be a bearish signal, UBS said in a report June 7, when prices dropped the most in three weeks………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

There was plenty of speculation in the media earlier this year that the gold price was being driven down by fears of a sell-off by the central banks of struggling Eurozone economies like Cyprus. Desperate to raise money (so the story goes) central bankers in Italy, Spain and Greece might also plunder their vaults, constituting a far more substantial combined holding than Cyprus, with dire consequences for the gold price.
The eurozone’s crisis can be blamed for many things but the recent sell-off in gold which saw over $250 taken off prices in the space of a month is probably not one of them………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

The pain is not likely to be over for investors in mining shares after the steepest drop in gold prices in a generation led to a $6 billion asset writedown at Australia’s Newcrest Mining, fuelling speculation of more to come.
A $200 plunge in prices in two days in April heightened fears that gold’s 12-year rally may have topped out. For nearly a month the price has languished around 1,400 an ounce, which could force more miners to write down the value of their reserves - calculated based on a higher price - and eroding the value of projects, some of which may no longer be profitable………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Silver prices peaked in April 2011 and dropped about 60% over the next 25 months. Sentiment by almost any measure is currently terrible. Few are interested in silver; most have lost money (on paper) if they bought in the last two and one half years, and the emotional pain seems considerable. It reminds me of the years after the NASDAQ crash in 2000.
So will silver drop under $15 or rally back above $50? ……………………………………….Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Speculators returned to bolster their net-long positions in all precious metals futures and options traded on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data.
For the week ended June 4, a mix of short covering and new buying lifted speculators’ net-long positions in the Commodity Futures Trading Commission’s weekly commitment of traders report, following mixed activity in the previous report. Funds also whittled down their net-short position in copper………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Global financial services provider Barclays has forecast a fragile outlook for the gold price this year but is optimistic about a rise in the platinum price in the coming months.
Gold, which had been a front runner among commodities from 2009 until earlier this year, was expected to remain soft with the average price likely to rise 4 percent to $1 500 (R14 969) an ounce, Barclays managing director of commodities and research Kevin Norrish said last week………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

With miners the worst performers out of any sector in the FTSE 100 this year, you would expect last week’s annual mining shindig at Lord’s cricket ground in London would be a gloomy affair.
This was not the case. An air of optimism was breathed into the room by the new head of the world’s largest miner, but it seems clear that looming changes in China will result in a paradigm shift in the mining industry………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

China’s slowing economic growth is weighing on base metal prices. The country’s consumer inflation rose 2.1 per cent on-year in May, compared with 2.4 per cent in April. “The sluggish economic indicators seen may continue to pressure base metal prices today,” OCBC Bank says in a note.
Base metals are sensitive to economic data from China, the world’s biggest consumer of industrial metals. However, in copper, OCBC says markets may get concerned about supply risks after recent shutdowns at Grasberg and Utah………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Chinese securities regulators approved for launch two gold bullion gold ETFs that will trade on the Shanghai stock exchange, bringing to investors in China an ETF concept that has been a smashing success in the U.S. but that has run into head winds in recent months as the 12-year gold rally falters.
The approvals allow Huaan Asset Management Co. and Guotai Asset Management Co. to proceed with separate product launches, according to a report published by Bloomberg News that cited sources at both asset management firms. It wasn’t clear from the report when the products might go live………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

US nonfarm payrolls jobs data surprised to the upside last week, fuelling expectations that the Federal Reserve will move to ‘taper’ its bond buying program in H2 2013. While jobs numbers have been better than expected recently, rising bond yields are likely to give the US central bank a reason to keep current stimulus activities in place.
Market participants appear to be largely ignoring other mixed US data, like last week’s disappointing reading for the US manufacturing ISM index. We expect investors will need to revise currently overly hawkish expectations regarding the Fed’s activities in coming months………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

OTC Global Holdings LP (OTCGH), the leading independent interdealer broker in commodities markets, formally announced today that its subsidiary, EOX Exchange LLC, filed its application with the U.S. Commodity Futures Trading Commission (CFTC) for designation as a contract market (DCM).
A wide range of derivative products will be offered on the EOX Exchange, including futures and options in natural gas, crude oil and refined products, natural gas liquids, power and agricultural products………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

As the Dubai Gold and Commodities Exchange unveils another rise in volumes, Galen Stops looks at what is behind the exchange’s recent success. 2012 was a year that most derivatives exchanges would rather forget. But for the Dubai Gold and Commodities Exchange it was the best year ever as volumes grew 138%.
The Dubai Gold and Commodities Exchange was founded in 2005 and had been growing steadily, if not spectacularly, until the beginning of 2011. That year it more than doubled the 2010 volumes, but with 4m contracts traded for the year, it was still a small exchange………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

In Brazil they just conducted a swap operation to try and support t the currency as the Brazilian real moved to 2.16 intra-day lows before the operation. If they are in trying to support the currency now after spending the last 18 months trying to weaken, this is a bit of cruel irony for Finance Minister Mantega, President Rousseff, and the Brazil Central Bank.
Inflation which was not out of control is gaining momentum after a 9% move in the currency in in two months. Now while S&P rating agency and other credit agencies are lowering their outlook for Brazil the government’s game plan is uncertain as the market ties their hands………………………………………..Full Article: Source

Posted on 11 June 2013 by VRS |  Email |Print

Thanks to the life support of $12 trillion and 515 rate cuts by the world’s central banks since March 2009, the global economy’s heart is beginning to beat again. As the market senses a robust economic recovery is underway, expectations are climbing that this growth will continue. Even the Federal Reserve has hinted that it may taper quantitative easing because of the improved economic situation. As a result, interest rates are increasing.
Europe was the lone wild card, but following Germany’s change of heart away from austerity, a positive outlook for growth, and therefore, rates, is rising in that area of the world as well………………………………………..Full Article: Source

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