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Commodities Briefing 10.Sep 2013

Posted on 10 September 2013 by VRS |  Email |Print

Commodity prices soared during the first decade of this century. But now the party is over. New sources of supply are coming online just as demand from China is slowing, leading to expectations of price declines. Should investors shun commodity-related investments? We don’t think so. Still, the new environment will require that investors take a more focused approach to extract commodity returns.
From 2001 through 2010, commodities posted double-digit price increases year after year, with only a brief pause during the global financial crisis. Those days are over………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

As concerns over the Syria crisis persist, oil and gold prices have risen, prompting investors to look at commodities as “the only contrarian play left in the market”. WTI Crude oil is currently trading at $108.5 per barrel and Brent has shot up to $115.6, while gold topped the $1,400 mark last week to enter a new bull market.
The Thomson Reuters/Jefferies CRB Commodity index has climbed more than 6% from its June trough, up from 275.6 on 28 June to 292.7 on 3 September………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

The once obscure Baltic Dry Shipping Index came to prominence at the start of the Chinese-led commodity supercycle around a decade ago. The London-based Baltic Exchange tracks the cost of moving commodities along more than 50 routes around the world. With China’s emergence as the dominant trading economy in the world the index became one of the go-to barometers.
China now controls the global trade in just about every commodity including iron ore (representing over 60% of the seaborne trade), copper (42%), coal (47%), nickel (36%), lead (44%) and zinc (41%) and the death of the supercycle now seems to have been exaggerated………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

The Organisation of Petroleum Exporting Countries(OPEC) may cut oil production by half a million barrels a day when its meets in December, the International Energy Agency(EIA) has said. The body said if all go accoridng to plans, the reduction in production would be the first in five years since the last time such exercise was carried out was 2008.
It said: “ The last time OPEC cut its oil output was in late 2008 when it reduced production to 4.2 million barrels a day. During this time, oil demand fell and prices crashed amid the financial crisis………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Iranian oil minister Bijan Zanganeh said Monday it was unlikely that OPEC would be able to appoint a new secretary general to run the group’s Vienna secretariat when it makes another attempt in December to fill the post, parliamentary news service icana.ir reported.
OPEC has so far failed to agree on a successor to Libyan Abdalla el-Badri, whose second three-year term as secretary general ended on December 31, 2012, but who was asked to remain in the post for an additional year………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

The International Energy Agency said oil markets were currently well supplied and did not warrant any action by the West’s energy watchdog despite a recent spike in prices. Supply outages from Libya and concerns the escalating situation in Syria could spill into other Middle East countries has pushed up prices for international benchmark Brent by nearly $8 this month to over $115 a barrel.
The IEA comprises OECD countries that hold strategic inventories which can be released in the event of a supply disruption in oil markets. A spokesman for the IEA said that while the agency was concerned about the impact of high oil prices on the global economic recovery, currently the market was ‘adequately supplied.’……………………………………….Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

The combined carrying capacity of oil tankers leaving Iranian ports last month rose 6.4 percent from July, vessel-tracking data compiled by Bloomberg show.
The implied capacity of departing vessels rose to the equivalent of 1.07 million barrels a day from 1.01 million barrels, according to signals gathered by IHS Maritime, a Coulsdon, England-based research company. The data may be incomplete because not all ship transmissions are captured………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Speculators continued to cut back on bearish gold bets and build their bullish gold positions as prices neared $1,400 an ounce, according to U.S. government data released Friday.
Speculators also added to bullish silver and platinum positions in both the legacy and disaggregated weekly Commitment of Traders reports released by the U.S. Commodity Futures Trading Commission for the week ended Sept. 3. Palladium saw traders’ trim their net-long position, while funds also became a little more wary in copper………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

This year, gold bottomed out in a final downward thrust at the end of June and then started building back up. At the same time, a lot of anecdotal evidence began to reveal an extremely tight supply situation in the global gold market. Taking all of that together, I was fairly confident in calling a bottom for gold.
Then, the equities started to respond. However, the situation in Syria prompted some safe-haven demand in the last few days and the mining equities stepped back; with safe-haven demand, investors want the metal, not the paper. But that was just a brief blip. I see an open road ahead for gold metal and gold equities………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

According to Reuters, the Indian rupee staged a sharp recovery last Wednesday after suspected heavy dollar selling by the central bank, preventing the battered currency from slipping to a record low on the same day that the authority ushered in a new governor.
Raghuram Rajan, a former chief economist at the International Monetary Fund (IMF), took charge at the Reserve Bank of India as the country faces its worst economic crunch since a balance of payments crisis two decades ago………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Gold bullion gets a lot of attention in the financial media and economists talk about it regularly. Sadly, another precious metal, silver, isn’t usually a topic of discussion. This metal moves in line with gold bullion, and for investors, it can serve as an alternative to owning the shiny yellow metal.
When gold bullion prices started to tumble in late April and then declined even further in June, silver prices did the same. Please look at the chart below of silver and gold prices. The golden line represents the spot price of one ounce of gold bullion, and the red and green line represents silver prices per ounce………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Copper’s recent move higher has been driven good manufacturing numbers from China, the US and the UK and surprisingly strong industrial activity in the Eurozone. iStockAnalyst.com quotes a research note from investment bank JP Morgan underscoring the positive momentum in the base metal market and a more robust precious metal picture:
“The strong rebound in J.P. Morgan’s global manufacturing PMI, improving physical demand and our economists’ first upgrade of Chinese growth expectations since February make us turn tactically overweight………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

ETF Securities has launched a service for asset managers that want to access Europe’s exchange traded funds market but do not have the expertise, infrastructure or resources to build their own ETFs.
The service, known as Canvas, will allow managers to build products using ETF Securities’ existing infrastructure, to set up a bespoke ETF platform, to add an ETF share class to a Ucits fund and/or convert an existing Ucits into an ETF………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Exchange traded funds that hold alternative energy stocks are among some this year’s top-performing non-leveraged sector ETFs. So hot have been alternative energy funds that five of the 10 best non-leveraged ETFs year-to-date are play on alternative energy.
In terms of ETFs offering exposure to ex-U.S. developed markets, Japan funds have stood tall thanks to improving economic data and a weakening yen. Although it has been a rough year for emerging markets funds, some China ETFs have consistently strong all year while others have recently started delivering impressive returns……………………………………….Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Gold isn’t the only former darling that has fallen out of favor recently. Emerging market securities, which were on everyone’s “must own” list not long ago, have performed poorly over the last couple of years. After peaking in mid-2011, the MSCI Emerging Market Index has been on a bumpy downward trajectory culminating in a loss of 9.6% so far in 2013.
Some people fear that rising interest rates will slow global growth and that will have the most pronounced impact on the developing countries. A related fear is that the apparent slowdown in China will drag down not only that country’s securities but the stocks in many other emerging markets as well………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

Emerging markets’ currencies are crashing, and their central banks are busy tightening policy, trying to stabilize their countries’ financial markets. Who is to blame for this state of affairs?
A few years ago, when the US Federal Reserve embarked on yet another round of “quantitative easing,” some emerging-market leaders complained loudly. They viewed the Fed’s open-ended purchases of long-term securities as an attempt to engineer a competitive devaluation of the dollar and worried that ultra-easy monetary conditions in the United States would unleash a flood of “hot money” inflows, driving up their exchange rates………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

It is hard to envisage full independence for Scotland without making the “difficult” transition towards a separate currency, economists have warned. An independent Scotland’s economy could be dominated by England if it continued to use the pound, or by Germany if it joined the euro after a Yes vote, the experts said.
The stark warning was made in a report by Jim and Margaret Cuthbert, whose work on the Scottish economy has been regularly cited by SNP figures………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

European Union governments will discuss an emergency measure to help boost carbon prices this week as Lithuania seeks to advance talks on the draft plan, according to two EU officials with knowledge of the matter.
Lithuania, which holds the EU rotating presidency, plans to push for a mandate to start talks on the proposal with the European Parliament at a meeting of ambassadors from member states on Wednesday, according to the officials, who asked not to be identified, citing policy………………………………………..Full Article: Source

Posted on 10 September 2013 by VRS |  Email |Print

European Union carbon permits posted their biggest weekly gain in four months as the bloc’s regulator scaled back the handout of free allowances, reducing the risk of a sell-off by polluters.
December allowances climbed 17 percent this week, the biggest increase for the period since May 3, on the ICE Futures Europe exchange in London. The European Commission yesterday lowered its allocation of free allowances to industry by 12 percent through 2020, and delayed selling an additional 66 million metric tons of permits until next year………………………………………..Full Article: Source

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