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Commodities Briefing 25.Oct 2013

Posted on 25 October 2013 by VRS |  Email |Print

Anglo-Australian mining firm BHP Billiton Ltd (BHP) expects global commodities demand to grow 75% over the next 15 years driven in part by continued urbanization in emerging economies, the company’s chief executive said Thursday. Andrew MacKenzie told shareholders “we are already seeing signs of recovery in the global economy” after a challenging year due to slower global economic growth and weaker commodity prices.
Chairman Jac Nasser said the company is seeing moderate growth rates in the U.S. economy and a stronger U.S. housing sector and stock market. BHP expects continued recovery in the U.S. despite risk from the unwinding of the Federal Reserve’s monetary easing policy………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Jeremy Baker, executive director of commodity investments at Harcourt, sees change taking place as commodities are once again priced on fundamentals. Harcourt is part of the Swiss financial services group Vontobel, which acquired the alternative investments focused business in 2007.
Since then, Harcourt has been offering investors two funds on behalf of Vontobel: the Belvista Commodity fund; and, since 2012, the Belvista Dynamic Commodity fund. Both use the Dow Jones UBS Commodity TR Index (DJ-UBSCI) as a benchmark and aim to be overweight or underweight individual constituent commodities………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

James C. West, lead oil services and drilling analyst at Barclays Capital, is seeing incredible growth ahead for oil production around the world. In this interview with The Energy Report, West explains how likely constitutional change in Mexico will spur momentous industry growth, along with new deepwater targets opening up in offshore China.
Meanwhile, decent commodity prices and economic improvement in Eastern Europe are creating powerful oil price tailwinds. But the best news is closer to home, in North America. Find out which companies are positioned to thrive in the year ahead………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

The price of crude oil is likely to oscillate between USD 105-115 during the remainder of the 4th quarter due to the onset of winter when demand for heating oil spikes, said two Kuwaiti energy experts on Thursday.
The experts, Dr. Talal al-Bathali and Ahmad Hassan Karam, concurred on the premise that no geopolitical influences will probably affect the oil price during the 4th quarter as they did during the 3rd quarter when the Syrian crisis and the US debt ceiling issue dominated the political scene………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will reduce crude shipments through early next month as Saudi Arabia reduces exports, according to data from Oil Movements. OPEC, which supplies about 40 percent of the world’s oil, will reduce sailings by 110,000 barrels a day, or 0.5 percent, to 23.8 million barrels in the four weeks to Nov. 9, the tanker tracker said today in a report.
That compares with 23.91 million in the period to Oct. 12. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Six years after discovering giant offshore “pré-sal” oil deposits, so called because they lie beneath a thick layer of salt under the ocean bed, Brazil has finally auctioned the rights to develop some of its deeply buried wealth. On October 21st the Libra field, off Rio de Janeiro’s coast, was sold to a consortium led by Petrobras, Brazil’s state-controlled oil firm, and including France’s Total, Anglo-Dutch Shell and China’s state-owned CNOOC and CNPC.
Libra’s estimated 8 billion-12 billion barrels of recoverable oil make it the biggest oil prospect in the world to be auctioned this year. Once it reaches peak production, sometime in the next decade, it should increase Brazil’s output from 2.1m to about 3.5m barrels per day………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Gold should stay mired at lower levels in 2014 after posting its first annual loss in more than a decade this year when investors, emboldened by an improving global economy, sliced holdings, a Reuters poll showed on Thursday.
Prices are unlikely to see significantly more weakness from current levels however as heavy liquidation by investors slows, analysts said. The poll of 22 analysts conducted this month returned an average forecast for gold prices in 2014 of $1,322.50 an ounce………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Goldman Sachs said it expects gold prices to fall in 2014 driven by improving US economic data, rising real rates and the commencement of tapering of monetary stimulus by the US Federal Reserve.
The investment bank expects gold price to decline to $1,144 per ounce in 2014. “Gold will likely remain volatile in a $1,250-$1,350/oz range until clarity on tapering,” Goldman Sachs said in a note to clients dated October 23………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Platinum and palladium will be the best performing precious metals next year as record global car sales will keep them in short supply for a third year, according to the most-accurate forecasters.
The metals, used in catalytic converters, will be in a shortage for the longest stretch since 2005 for platinum and 2000 for palladium, Barclays Plc and Johnson Matthey Plc data show. Platinum will gain 13 percent to average $1,635 an ounce by the fourth quarter of 2014, according to the mean of eight estimates by the most-accurate analysts tracked by Bloomberg in the past two years. Palladium will gain 10 percent to average $823 an ounce, the most for a quarter since 2001………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

After expanding debt by more than $8 trillion and printing at least $85 billion per month, monitoring the “price” of practically anything is a risky option. Among other distortions created by price controls, sentiment is particularly vexing for the precious metals market.
First off, the banks that determine prices are trading houses that go months at a time without a trading loss. Second, the sample used to measure sentiment is based also on an entirely paper affair………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

World refined copper production in 2013 is expected to increase by 3.9% compared to 2012 as constrained production from maintenance and temporary operational shutdowns in some regions is ovrshadowed by expanded output in other regions, according to International Copper Study Group (ICSG).
In 2014, refined copper production is expected to grow by around 5.5% to 22.1 Mt with the restoration of production at existing plants and new and expanded capacity at electrolytic plants in China, and to a lesser extent SX-EW plants in Africa. Primary refined copper production is expected to grow by about 7% and secondary production by 2%………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Investing in metal mining ETFs has been pretty rough this year. After a bad stretch in the first half of this year, metal mining ETFs recovered somewhat thanks to the taper concerns as well as a sluggish dollar. However, Fed’s decision to hold back tapering of its monthly bond buying program on Sep 18 led to another slump for the mining ETFs.
While the ‘Taper hold’ decision infused fresh life in the equity market, it beat down precious metals like gold and silver causing these products to underperform the broader stock market greatly. The situation is even more depressing for the miners as compared to their bullion tracking counterparts as most mining companies tend to be a leveraged play on the prices of underlying metals………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

A friend recently bought the Vanguard FTSE Europe ETF (VGK) after reading an encouraging report of growth in Europe. He commented that he only uses exchange-traded funds (ETFs) today because he can “get his money back faster” than if he bought a mutual fund. That led to an interesting conversation about ETFs.
I helped my friend understand that ETFs are mutual funds under the law. The difference between the two has more to do with technicalities than anything else. ETFs receive some special treatment from the Securities and Exchange Commission (SEC)………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

After a sustained dullness in commodity exchange trade funds (ETF) sector, Q3 2013 proved to be a turning point for the industry driven by a combination of price increases and the largest quarterly inflows into non-gold commodity ETFs since Q1, 2012, according to ETF Securities Ltd.
On a sectoral basis, agri commodities, energy and platinum, silver led precious metals witnessed better inflows compared to industrial metals that lagged behind………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Singapore’s central bank said it was ready to assist in investigations into alleged manipulation of foreign exchange rates, potentially widening a probe in the $5.3 trillion-a-day FX market that already involves authorities in the United States, Britain, Switzerland and Hong Kong.
The announcement by the Southeast Asian city-state, the world’s third-largest FX trading centre after London and New York, comes just a week after Hong Kong said it was talking to foreign regulators and banks about the market rigging allegations………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Brazil’s real fell on speculation the central bank will limit rollovers of foreign-exchange swaps after the currency posted the world’s biggest two-month rally.
The real depreciated 0.3 percent to 2.1976 per U.S. dollar at 10:05 a.m. in Sao Paulo, the weakest level on a closing basis since Oct. 9. Swap rates on contracts maturing in January 2015 were unchanged at 10.49 percent………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Coffee prices tumbled to a four and a half year low as the market was hit by a continued flow of supplies from Latin America while the fall in the Brazilian real against the dollar encouraged selling by producers. Arabica coffee, the high-quality bean used in espressos and cappuccinos, has continued to plumb multiyear lows because of bumper crops in the past few years.
ICE arabica coffee for March delivery fell on Thursday to $1.1285 a pound, the lowest level since 2009, as Brazilian producers took advantage of the real’s decline against the dollar, locking in future sales prices………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Recently, global commodities investor, Jim Rogers made headlines when he recommended agriculture as the best sector for investment. According to him there were many options in agriculture-related sectors including farmland, agriculture stocks, food companies, processing plants and companies that make tools, machines, tractors, fertilizers etc for farming.
Stock markets in India and across the globe have been moving without direction even as equity pundits and analysts continue to give confusing ‘buy’ and ‘sell’ calls on companies and stocks. In India, equity market is largely driven by a handful of star stocks, leaving millions of investors in permanent losses as their mid-cap or small-cap shares have refused to go up………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Pretty well every economist you talk to will agree: If you want to reduce pollution, carbon or otherwise, the most cost-effective way to do so is with a price on the emissions of that which you seek to reduce. They’ll also tell you that, under some basic assumptions, the cost-effectiveness result holds whether you impose that price through a tax or by fixing allowable quantities of emissions, distributing the rights to emit, and making them tradeable – so-called cap-and-trade regimes.
This is taught in most first year economics classes, and you will test it under every conceivable permutation and combination of assumptions if you take an environmental economics class. It truly is economics 101………………………………………..Full Article: Source

Posted on 25 October 2013 by VRS |  Email |Print

Investors managing assets worth about $3tn have written to the world’s largest oil, gas and coal companies, calling on them to prepare for a possible decline in demand for fossil fuels caused by policies to fight the threat of climate change.
The letters, signed by 72 investors including several US state pension systems and fund managers such as Scottish Widows and Aviva, warn the companies that they may be investing in production capacity that will never be used………………………………………..Full Article: Source

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