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Commodities Briefing 05.Sep 2013

Posted on 05 September 2013 by VRS |  Email |Print

Commodities outperformed equities, bonds and the dollar in August with a surge in metals and oil prices, following lacklustre performance against other asset classes over the past two years. Commodity prices have largely been weak over the past two years as a stagnant world economy has coincided with ample supplies.
The 19-commodity Thomson Reuters-CRB index has shed 21 percent since April 2011, underperforming MSCI’s world equity index, which tracks shares in 45 countries, by nearly 30 percent over the past two years………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

A strike on Syria would at least temporarily boost oil prices on fears of violence spreading across the Middle East. But production problems elsewhere in the Middle East and Africa are keeping energy markets on edge.
Syria’s relative lack of oil and the rest of the world’s growing abundance of it means a US strike on the country is unlikely to immediately disrupt production of one of the world’s most prized commodities………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Global equity markets are still shaking with the prospect of a possible attack on Syria. This has significantly pushed up the global oil prices. This week US oil prices hit a two-year high. To find out more on what an attack on Syria might mean for global crude oil prices the Voice of Russia contacted Mr. Chris Cook, a Former Director of the International Petroleum Exchange and now a Senior Research Fellow at the Institute for Security and Resilience Studies.
We are actually seeing the definancialisation of the oil market. The oil market has beeen financialised for several years and we’ve been seeing the funds, which have been in that market, flowing out into equity markets, into buy-to-let and other asset classes. And this, having certain consequences on the market, this is not widely perceived………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Iran will not back down in its quest for an Iranian head of Opec, the country’s new oil minister, Bijan Zanganeh, was quoted by Mehr news agency as saying on Tuesday. The long deadlock over who should be the next secretary general of the Organisation of the Petroleum Exporting Countries has highlighted political tensions within the 12-country group that have increased due to Western sanctions on Iran.
Saudi willingness to raise exports to make up for a reduction in supplies from Iran and rising competition from Iraq has intensified the rivalries between the Gulf neighbours, with each having put forward a candidate for the job and none willing to back down………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Analysts at Barclays summed up the outlook for the energy market in a 145-page report issued Wednesday, forecasting that prices for oil will fall in the fourth quarter on the back of soft demand but stay high in 2014, in part because of instability in the Middle East.
“Oil demand is still soft and if supply does not recover as we expect, from an unusually high number of current outages, we believe a modest decline in oil prices from recent levels is the most likely outcome for Q4,” said Barclays analysts Miswin Mahesh and Kevin Norrish………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Physical gold demand slipped in August, as buyers were scared away by rising prices and investors sold, market watchers said.
For much of this year, gold demand, particularly from Asia, has underpinned prices and many market watchers credit the surge in purchases from that region as the reason why gold stabilized in July, after prices fell to the $1,182 area, basis December. However, as prices rose, demand began to soften, analysts said………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Angelos Damaskos, chief executive of Sector Investment Managers and fund adviser to the £6.8 million MFM Junior Gold fund, says gold could rise to $1,500 (£961) an ounce as US political figures plan for a military strike on Syria. Gold has continued to rise in August after hitting a low point earlier this year, at the time of reporting gold is at $1,400 an ounce.
Damaskos says following confirmation by United Nation (UN) inspectors that chemical weapons of mass destruction were used by the Assad regime, the threat of military intervention by the US and other UN members in Syria is unsettling the markets………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Sales of scrap gold in India are surging as the plunge in the nation’s currency drives bullion prices to a record, easing a supply crunch caused by curbs on imports by the world’s largest consumer.
Supplies of recycled bullion, mostly coins and bars, have climbed to 100 kilograms to 150 kilograms a day in Mumbai, the country’s biggest gold market, from 5 kilograms to 10 kilograms a week earlier, said Prithviraj Kothari, managing director of Riddhisiddhi Bullions Ltd. Investors, who bought the metal at lower prices, are leading the rush to sell, said S. Venkatesh Babu, president of the Jewellers’ Association of Bengaluru………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

The summer months are known for being a dull time for the resource markets, but this past August, silver beat the odds and recorded an impressive surge of nearly 20 percent, “outperforming everything else in the market,” according to Wall St. Cheat Sheet. That’s well above gold‘s jump of 5.7 percent.
Here’s a look at three factors, highlighted by Jack Farchy of the Financial Times, that helped silver make such notable gains………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Silver prices were mixed on MetalMiner’s daily index, as retail investors (e.g. buyers of US Mint silver coins) boost silver’s excitement. But other indicators seem to say, “Not so fast.” “Though the world may be witnessing recovery in growth, some silver-specific sectors – most notably the solar panel industry – are struggling,” according to the Financial Times.
“And bankers say that Chinese interest in silver, either from investors or industrial users, remains unremarkable: the country’s net imports have fallen and Chinese silver premiums, a closely followed indicator of the strength of demand in the country, have remained weak………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

The fastest Chinese steel output on record is still too slow to meet demand from builders, reducing inventories and driving prices toward a bull market. Production of steel reinforcement bars rose 14 percent to 113 million metric tons in the first seven months and stockpiles slumped 35 percent from an all-time high, data compiled by Bloomberg show.
Rebar, accounting for almost one-third of steel output in China, will average 4,000 yuan ($655) a ton in the fourth quarter, 7 percent more than now and the highest in more than a year, according to the median of 15 analyst estimates………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Crude oil prices – stuck in a relatively tight range in the first half of the year – have bounced back sharply to the triple-digit mark in the second half. The price surge was backed by seasonality and some other key factors.
First, higher oil demand is a seasonal summer trend not only in developed nations but also in emerging economies. Second, the political unrest in the Middle East could boost uncertainty and increase the likelihood of a supply disruption. Third, encouraging labor and retail sales data, signaling a strong U.S. economy, have added to the bullishness……………………………………….Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Investors pulled more than $17 billion from U.S.-listed exchange-traded funds in August, the largest monthly outflow in the 20-year history of the ETF industry, data firm IndexUniverse said on Wednesday.
The asset management arm at Boston-based State Street Corp experienced the heaviest redemptions among ETF sponsors with $19.5 billion in outflows during August, IndexUniverse said. Most of that amount, $14 billion, was pulled from the SPDR S&P 500 ETF, as jittery investors worried about the stock market………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Turkey’s monetary policy took another twist as central bank officials told analysts Wednesday they welcomed currency volatility, signaling a reversal after fighting for stable exchange rates for two years.
The move was yet another surprise by the Ankara-based central bank, which has been battling a currency rout in emerging markets. Turkey’s currency hit a record low of 2.0733 to the dollar last week after Governor Erdem Basci ruled out rate hikes even as he said officials would defend the lira “like lions,” forecasting it would be up to 1.92 against the greenback by year-end………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Developing nations from Brazil to India are preserving a record $2.9 trillion of foreign reserves and opting instead to raise interest rates and restrict imports to stem the worst rout in their currencies in five years.
Foreign reserves of the 12 biggest emerging markets, excluding China and countries with pegged currencies, fell 1.6 percent this year compared with an 11 percent slump after the collapse of Lehman Brothers Holdings Inc. in 2008, data compiled by Bloomberg show……………………………………….Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

Cotton growers around the world spent an average of 11 cents on planting seed to produce a kilogram of lint in 2012/13, representing 7% of the net cost of production. (Net costs are total costs excluding land rent and the value of cottonseed.)
In the 1990s, the cost of planting seed averaged 4 cents per kilogram of lint. Planting seed rose to 9 cents per kilogram during the 2000s and has now reached 11 cents, according to a report from International Cotton Advisory Committee………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

The EU is ready to compromise over its tax on airline carbon emissions if opponents, led by the United States and China, apply a similar levy by 2016, a European source said on Wednesday.
The source said Brussels will put the plan to the International Civil Aviation Organisation (ICAO) later this month in the hope of getting a deal to tackle the carbon dioxide emissions many blame for global warming. Late last year, after running into a storm of criticism, the EU suspended its CO2 Emissions Trading Scheme (ETS) for intercontinental flights for 2013, saying it wanted to give all sides more time to reach a global accord………………………………………..Full Article: Source

Posted on 05 September 2013 by VRS |  Email |Print

It is time to confront the post-election reality - within months of any Tony Abbott election victory the Australian Parliament will vote for the carbon tax, an emissions trading regime and pricing carbon in defiance of Abbott’s mandate.
Kevin Rudd could not have been clearer yesterday. Carbon pricing is integral to Labor’s political ideology. Rudd was explicit: carbon pricing and an ETS means Labor is on “the right side of history”. He said Labor’s policy was right now, right five years ago and right into the future………………………………………..Full Article: Source

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