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Commodities Briefing 13.Sep 2013

Posted on 13 September 2013 by VRS |  Email |Print

Commodity demand in China, the world’s largest user of iron ore, copper and tin, will rebound through the end of the year as infrastructure projects gather pace and users restock, according to Goldman Sachs Group Inc.
The key demand driver is infrastructure and fixed-asset investment, analyst Julian Zhu told reporters at a briefing in Singapore today. Steel prices in the world’s largest producer were seen higher through the end of December, Zhu said………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Commodities were higher in August as China’s growth outlook improved and the risk of the US Federal Reserve tightening remained uncertain. Nelson Louie, Global Head of Commodities in Credit Suisse’s Asset Management business, said, “Chinese growth may have stabilized over the period. Commodities are likely to benefit from improving Chinese growth momentum, as it may be supportive of increased demand. At the same time, mixed US economic data and sharply declining emerging market currencies and securities have clouded the already uncertain outlook regarding the possibility of a Federal Reserve tightening in September.”
“Regardless of whether the Federal Reserve tapers or not in September, it seems unambiguous that the Federal Reserve is going to err on the side of being overly easy with its policies. This may increase the risk of inflation overshooting expectations, especially should economic growth materialize stronger than is currently expected.” (Press Release)

Posted on 13 September 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will increase crude shipments by 1.5 percent this month to meet rising demand from Asian refiners, tanker tracker Oil Movements said.
OPEC, which supplies about 40 percent of the world’s oil, will boost exports by 360,000 barrels a day to about 23.87 million barrels a day in the four weeks to Sept. 28 from the period to Aug. 31, the researcher said in a report. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Global oil supplies look comfortable despite a massive outage in Libyan output and oil prices could see some downward pressure if sharp currency depreciation in emerging markets leads to softer demand, the International Energy Agency (IEA) said.
The IEA, which coordinates energy policies for developed economies, said global oil supply was set to jump in the next months thanks to a mix of seasonal, cyclical and political factors and notwithstanding the Libyan problems………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

OPEC produced 0.8 percent less crude oil in August due to declining Libyan output, even as Saudi Arabia pumped the most in 32 years, the International Energy Agency said. The 12 members of the Organization of Petroleum Exporting Countries produced 30.51 million barrels a day last month, the Paris-based IEA said today in its monthly oil-market report. This compares with an upwardly revised estimate for July of 30.77 million barrels.
Libya’s output fell to an average of 550,000 barrels in August from 1 million barrels in July, according to the report. Saudi Arabia, OPEC’s biggest producer, pumped 10.19 million barrels a day, up 190,000 barrels from July, the IEA said………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

The International Energy Agency cut estimates for the amount of crude OPEC will need to provide next year as supplies from North America surge. Demand for crude from the Organization of Petroleum Exporting Countries will be 29.2 million barrels a day or 1.3 million a day lower than the group’s current production levels, the IEA said on Thursday in its monthly market report.
The impact of supply losses in Libya and threats to exports from the crisis in Syria will be softened as fading seasonal demand allows oil inventories to replenish, the Paris-based adviser to energy consuming nations said………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

The International Energy Agency has added 70,000 barrels per day to its prediction for 1.1 million-barrel daily demand growth next year. The Paris-based intergovernmental energy advisors said that next year would see increased demand growth “as the underlying macro-economic backdrop solidifies”.
The move reverses much of a 100,000-barrel cut made by the agency last month from July’s forecast of 1.2 million to 1.1 million as a result of lower GDP expectations from the International Monetary Fund………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Oil prices jumped significantly during the month of August following uncertainty in the Middle East. However, the fundamentals of the oil marker point towards a declining trend in the oil market throughout the remaining months of 2013 and through 2014.
The Energy Information Administration (EIA) released its short-term outlook for the month of September 2013 and has indicated that the recent hike in crude oil prices was only temporary. Supply disruptions from Libya and conflicts in Syria were considered the main factors driving the price of oil upwards………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Dr. Kent Moors writes: By an apparent agreement to place its chemical weapons under international control, Syria seems to have dodged an imminent American military attack. Yet even as the world takes a step back from the brink, three critical questions still remain:
Will Syrian President Bashar Assad hand over all of his chemical weapons? Will the proposed international control mechanisms satisfy Washington? Will the final result contained in the U.N. report on the chemical weapons use outside of Damascus alter the outcome?……………………………………….Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

The global oil market is well balanced and top exporter Saudi Arabia ready to supply whatever volume of crude is needed to meet demand, Saudi Oil Minister Ali Al-Naimi said here, Thursday.
Saudi Arabia produced record high volumes of crude in August as it boosted output for the second time in two years to cushion the global oil market from supply disruptions. Naimi’s comments come after producer group OPEC this week sought to reassure consumers there is sufficient supply to cover a plunge in Libya’s output………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

There may be as much as 48 billion barrels of oil and 292 trillion cubic feet of natural gas in the Caspian region. There’s probably even more yet to be discovered. In June, a BP-led consortium operating in the Shah Deniz natural gas field in the Caspian Sea chose a pipeline option that could redraw the European energy map.
On Wednesday, operators at one of the largest oil fields in the world, Kashagan, announced the first well was opened for production. With Russian energy shifting its focus elsewhere, the Caspian region may be fast becoming Europe’s preferred choice for oil and gas………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Seaborne coal prices will continue to face bleak prospects this year as AP 12 coal, CaL14 have broken below $90 per metric ton and now trading at $84/metric ton, according to Bank of America Merrill Lynch (BofAML ).
In a new report it said that producing nations are not curtailing production but cutting costs while Colombian exports are likely to rebound as port strike is coming to an end………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Gold prices are likely to contract further in 2014, after tumbling for the first time in more than a decade this year with the case for bullion undone by confidence in a stabilising global economy, a metals consultancy said on Thursday.
In an update to its Gold Survey 2013, Thomson Reuters GFMS said the market could beat a retreat below $1,300 towards the end of 2014 as U.S. monetary stimulus is withdrawn, fuelling talk of rising interest rates………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

HSBC Global Research raised its 2013 gold price forecast and said physical demand is becoming a major driver for the yellow metal. The bank lifted its gold price outlook for this year to $1,446 per ounce from $1,396, and kept its 2014 forecast unchanged at $1,435 an ounce. Spot gold was trading at $1,330.66 at 17:36 GMT on Thursday.
“Physical demand for jewelry, coins, and bars from China, especially, are supportive and becoming a key driver,” HSBC said in a note on Thursday………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Next week the FOMC will meet for one of their eight scheduled meetings. It is this particular meeting that has had traders, market commentators and investors almost in frenzy as they try to predict the outcome. It seems everyone is convinced that tapering will go ahead, as of next week, and the gold bears believe that this will signal gold’s demise.
Given the drop in the gold price each time tapering is merely hinted at, one might not be surprised at this prediction. However, as we have learnt since April’s gold price drop, gold investors continue to stock up on gold regardless of what they pay for it. We believe the same will be the case if and when tapering begins………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Another big precious metals bull run might lie just around the corner, seasoned commodity investor and publisher of The Morgan Report, David Morgan, told attendees at the Toronto Resource Investment Conference 2013 on Thursday morning, pointing to technical analyses suggesting the precious-metal bears might be headed for hibernation soon.
A technical analysis of gold and silver price charts, which mostly entails drawing straight lines to see whether trends are positive or negative, points to the gold price technically still being in an upward trend………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Stumbling commodity prices have forced mining companies to take a hard look at their operational efficiencies and to re-evaluate the margins of certain projects. In Australia, the falling gold price has resulted in massive impairments, with gold miners Newcrest and Evolution Mining reporting impairment charges of A$5.56-billion and A$384.3-million respectively during the year ended June.
The declining commodity prices have also prompted a rash of mine closures and deferrals in Australia, as low-grade operations struggle to make ends meet in the current economic climate………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Ossiam, a provider of smart beta exchange-traded funds (ETFs) and affiliate of Natixis Global Asset Management, has listed the world’s first risk-weighted commodity ETF, the Ossiam Risk Weighted Enhanced Commodity ex. Grains TR UCITS ETF (CRWU).
The fund is fully UCITS compliant and provides investors with systematic long-only exposure to a diversified basket of 20 commodities futures contracts (excluding grains) with reduced volatility. It has been listed on the London Stock Exchange, Borsa Italiana, NYSE Euronext Paris and Xetra………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Thanks to the recent commodity strength, precious metals have rebounded from their lows and even moved higher. In fact, precious metals surged double digits from their three-year lows reached in late June. This incredible performance was mainly driven by improving global economic conditions.
The latest report from China shows that economic growth is now picking up after slowing down in the first half of the year while the euro zone finally emerged out of its six-quarter long recession in the second quarter. The U.S. is also growing at a faster clip with upbeat manufacturing data and an improving labor market………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

The California State Teachers’ Retirement System said it has picked Hermes Fund Managers to be one of its two commodity managers, the first major step toward realizing the portfolio approved three years ago as an inflation hedge.
CalSTRS, the second largest U.S. pension fund with about $150 billion in assets, had considered a $2.5 billion allocation when it first studied a foray into commodity markets in 2010. It eventually settled on a portfolio of $150 million………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

In the five years since Wall Street’s world ended, what has been the best major asset class to own? Friday, September 12, 2008, was the last trading day before the cataclysm of Lehman Brothers’ bankruptcy. With Federal Reserve printing presses working overtime for most of the period since then, gold would not be a bad guess.
And indeed, while the metal’s price is down roughly a quarter since its September 2011 all-time peak, it is still up 82% since the start of the financial crisis. As for home prices–one of the Fed’s big targets for help–they have made back their ground, but are now only slightly above where they were when disaster struck………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Members of a House of Representatives committee discussed with top Obama administration officials whether it makes sense to include rules limiting government currency interventions in a trade pact under negotiation with Asian and Pacific countries, according to attendees at the meeting.
Rep. Sander Levin (D., Mich.) and other critics have blamed China and Japan for working to weaken their currencies unfairly, a move that can put U.S. goods, including American-made cars, at a relative disadvantage………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

The rally that made the pound the best-performing major currency the past six months is gathering momentum as the U.K. economy defies the skeptics.
Options traders are the most bullish on the pound versus the euro since November and have cut bets Britain’s currency will weaken against the dollar to the least since May. While economists and strategists have raised their forecasts for the pound against the greenback to the highest since April, the median estimate still calls for a 4.4 percent decline by year-end, data compiled by Bloomberg show………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

Uncertainty over the future of Australia’s carbon tax and emission’s trading scheme could go on for a year or more. But academic and author Guy Pearse says with or without a price on carbon, Australia’s contribution to the world’s climate problem is set to dramatically increase over coming decades.
This is because of our growing coal exports. Australia, like other countries, takes no responsibility for the greenhouse pollution from its thermal coal once it’s exported and burnt in foreign power stations………………………………………..Full Article: Source

Posted on 13 September 2013 by VRS |  Email |Print

I went to Boston this week to speak at The Oxford Club’s Private Wealth Seminar. Boston is one of my favorite towns. I love its historical links to liberty, American independence and… commodities. How do commodities figure into American history?
People forget that the Boston Tea Party was really a protest over price-fixing of a vital commodity. The American colonists thought drinking tea prevented horrible ailments like dysentery and cholera………………………………………..Full Article: Source

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