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Commodities Briefing 06.Sep 2013

Posted on 06 September 2013 by VRS |  Email |Print

As some investors clamber to buy oil before a potential U.S. strike in Syria, others are advocating what seems like a counterintuitive strategy: sell, sell, sell. Against common wisdom, some say military action in Syria is more likely to cause prices to fall because markets have already risen in anticipation of a U.S. intervention and there is little actual oil at risk in Syria.
“The higher the run-up prior to the event, the greater the post-event decline,” said Morgan Stanley in a note this week. “We would be sellers on any upward price action on military intervention in Syria.”……………………………………….Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will increase shipments of crude by 1.7 percent this month, tanker tracker Oil Movements said. OPEC, which supplies about 40 percent of the world’s oil, will boost exports by 340,000 barrels a day to about 23.84 million barrels a day in the four weeks to Sept. 21 from the period to Aug. 24, the researcher said in a report.
The figures exclude two of OPEC’s 12 members, Angola and Ecuador. Brent crude traded today at about $114.70 a barrel on the ICE Futures Europe exchange in London. It gained 5.9 percent last month amid unrest in Egypt, Libya and Syria………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Thanks to increased domestic oil production and falling demand, energy independence is becoming a realistic goal for the U.S. But that doesn’t mean it won’t be vulnerable to price shocks if a Syria attack goes bad.
If the U.S. does strike Syria, the price of oil — already at $115 and rising in the Brent index, largely because of political disruptions in Libya, a major producer — is likely to spike. It’s not that Syria is a major oil producer — even before the war its exports were modest by Middle East standards, and now the embattled regime of Syrian President Bashar Assad can manage just 50,000 barrels a day, barely 5% of what tiny Oman can pump………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

News came out last week that Apache is divesting a big chunk of its Egyptian oil acreage. The company will sell one-third of its rights there to Sinopec for $3.1 billion.
Most analysts assume that Apache’s divestment is driven by recent political problems in Egypt. But the company’s moves elsewhere suggest the deal may be part of a larger, and more interesting, trend. In July, Apache cut a deal to divest another of its core operating areas: the U.S. Gulf of Mexico Shelf. The major sold this acreage to privately-held Fieldwood Energy, for $3.75 billion………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Raymond J. Learsy, author of “Ruminations on the Distortion of Oil Prices and Crony Capitalism,” says the OPEC oil cartel is under “far greater stress” as the U.S. approaches energy independence. Learsy talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”……………………………………….Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Turmoil in the Mena region has been awful for the people of the region. The same cannot be said for Opec, the oil group. The long list of crises - violence in Iraq, fear of sectarian spillover from the Syrian conflict, oil worker strikes in Libya and sanctions against Iran - has conspired to keep crude prices high.
The oil world is changing, and the group is losing out. Opec’s latest Monthly Oil Market Report projects an increase in global demand in 2014 of more than 1 million barrels per day to 90.75 million bpd, but the supply needed from Opec is expected to fall by more than 260,000 bpd to 29.65 million. The group pumped 30.32 million bpd in August, a survey by Reuters shows………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Crude oil in the United States has lost more than a dollar per barrel, amid fears that a possible military strike on in Syria might disrupt Middle East oil exports. US oil saw a dramatic drop in its global rate as it appeared that a military strike against Syria would disrupt its supply, Fox Business reports.
The drop comes after the US Senate Foreign Relations Committee passed a resolution authorizing use of military force in Syria on Wednesday………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Gold traders are divided on the outlook for prices next week, weighing signs of an improving U.S. economy against the threat of a military attack on Syria. Two years after bullion set a record, the majority said a new peak won’t be reached in the next 24 months.
Thirteen analysts surveyed by Bloomberg expect prices to rise next week, the same number were bearish and five were neutral. Gold slumped 29 percent since it reached an all-time high of $1,921.15 an ounce on Sept. 6, 2011. Eighteen people surveyed said the metal won’t exceed that level in the next two years and 11 predicted another record………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

United States President Barack Obama and officials within the administration are beating the drums of war. How will this affect the markets, specifically commodities like gold and oil?
More than a decade after the wars in Afghanistan and Iraq were launched – not to mention the various strikes against Yemen, Pakistan and other countries initiated by President Barack Obama throughout his tenure as commander in chief – the United States is drumming the beats of war again, this time in Syria………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

If you have been following the gold price’s bumpy ride this year, two simple charts will tell you everything you need to know about the yellow metal’s prospects, writes Greg Guenther in the Rude Awakening from Addison Wiggin’s Agora Financial.
Gold futures are sinking this morning [Weds 4 Sept]. The gold price has dropped about $18 from yesterday’s highs, putting gold just below $1395. Gold has slowly trended lower over the last 5 sessions. Its price is consolidating just below $1425. So if you’re a fan of the rally off its July lows, you should be encouraged by this action………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

One of the most difficult things to do as an investor is to buy when others are selling. This is the most common mistake investors—both the retail public and some professionals—make.
The recent move in gold shows the difference between short-term and long-term thinking. While many investors were hesitant to step in and start buying gold as the price was dropping, many central banks were doing just the opposite………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

According to Reuters, gold rose after President Barack Obama won the backing of key figures in the U.S. Congress, including Republicans, in his call for limited strikes on Syria to punish the government for its suspected use of chemical weapons against civilians.
Earlier on Tuesday, a missile test by Israeli forces training in the Mediterranean with the U.S. Navy set nerves on edge. These circumstances stimulated safe-haven buying in the gold market and resulted in an increase in price to above $1,416 an ounce………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Anyone investing in silver last month enjoyed gains as silver exchange-traded funds such as the ETFS Physical Silver Shares Trust were among August’s top-performing funds. The funds followed the price of silver upward during the month, which surged about 20%.
Silver has now gained 29% from a 34-month low hit on June 28. The precious metal gained on the back of several factors, most of which look set to continue in the months ahead………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Since starting work at the Esperanza copper mine in northern Chile two years ago, Erick Moreno has tripled his salary and is preparing to buy his first home. The pay, he says, is so good that he’d never take another job.
“I am going to die in this industry; I don’t see myself anywhere else,” he says. While Moreno finished his engineering studies at the University of Antofagasta, he says many fellow students dropped out to work in the copper mines. Most of them already own their homes and drive sports cars………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Global ETFs and ETPs suffered record net outflows of US$16.77 billion in August after gathering near record net inflows of US$45.26 billion in July, according to ETFGI’s Global ETF and ETP industry insights report*. ETF and ETP assets have declined from the July record high of US$2.17 trillion to US$2.11 trillion at the end of August 2013. There are now 4,938 ETFs/ETPs, with 9,932 listings, from 211 providers listed on 57 exchanges.
“Investors’ concern and uncertainty over the impact on markets of a potential military conflict in Syria and when and how the Fed will begin QE tapering caused investors to net withdraw US$16.77 billion from ETFs/ETPs in August” according to Deborah Fuhr, Managing Partner at ETFGI………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

There has been some price momentum as well as a substantial uptick in trading volume in ETFs that target exposure to the broad commodity markets.
Notably, DBC (PowerShares DB Commodity, Expense Ratio 0.93%) the largest ETF in this category, traded more than 10 million shares yesterday (versus ADV of 1.8 million) and related ETF GSG (iShares S&P GSCI Commodity, Expense Ratio 0.75%) saw more than 4 million shares trade on Tuesday as both funds have seen steady asset inflows………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Brazilian central bank BCB’s commodities price index IC-BR increased 3.77% in August, month-on-month, according to the bank’s website.
In August, the highest Increase was seen in metals (aluminum, iron ore, copper, tin, zinc, lead and nickel), at 9.70%, Followed by energy commodities (oil, natural gas and coal), up 21.4%. Agricultural commodities (beef and pork, cotton, soya oil, wheat, sugar, maize, coffee and rice) were up 2:38%. (Translated)……………………………………….Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Foreign-exchange trading surged to an average $5.3 trillion a day in April 2013, boosted by greater yen volumes, the Bank for International Settlements said. Trading increased 33 percent since the same period in 2010, the BIS said, citing a survey of currency traders it runs every three years. That’s an acceleration from a 20 percent increase in the three years through 2010.
The yen had the biggest jump in trading activity among major currencies, while the euro’s role as the second-most traded currency was reduced. Emerging-market currencies increased their share, with the Mexican peso entering the top 10 most-actively traded currencies………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Five large developing countries are moving closer to launching a mutual support fund as a response to large outflows of capital from emerging markets, Russia’s finance minister said Thursday.
But the group—Brazil, Russia, India, China and South Africa—appear unwilling to embark on coordinated action to stabilize volatile currencies soon, with China’s vice finance minister saying there is no need for a rescue plan and stressing that it is up to each country affected by recent markets turbulence to concentrate on putting its own house in order………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Qatar’s one-year currency forwards jumped to a three-year high yesterday and yields rose at a weakly-supported debt auction as foreign investors responded to concerns about Syria by cutting exposure to the Gulf Arab region.
One-year riyal forwards rose as high as 160 points bid yesterday from Wednesday’s close of 115, traders said. That suggested a 0.4 percent weakening of the riyal from its peg of 3.64 to the dollar over a one-year period………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Emissions traders want United Nations climate talks in November to set rules on a trial system of globally linked carbon markets, according to their Geneva-based lobby group.
A market framework recognized by the UN would allow member countries to pursue their own carbon-cutting programs, while providing a “large” pool of tradable emission-reduction credits, Dirk Forrister, president of the International Emissions Trading Association, said yesterday by phone. Prices in the pool may be lower than in individual markets, which would attract nations seeking to cut costs, he said………………………………………..Full Article: Source

Posted on 06 September 2013 by VRS |  Email |Print

Indonesia and Japan recently signed the Joint Crediting Mechanism (JCM) for carbon trading, enabling both countries to benefit from investments in environmentally friendly projects, said an official on Friday.
“We will benefit from Japan`s investments in Indonesia, particularly in projects aimed at reducing carbon emissions. Meanwhile, Japan can get credit for its efforts to reduce carbon emissions,” explained Deputy of Coordinating Minister for the Economy Rizal Affandi Lukman………………………………………..Full Article: Source

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