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Commodities Briefing 28.Oct 2013

Posted on 28 October 2013 by VRS |  Email |Print

Conditions are ripe for the launch of commodities options, China’s securities regulator said on Friday, a sign that it will soon approve some of the options contracts proposed by local futures exchanges.
China’s securities watchdog currently bars options trading, but all of China’s commodity exchanges, including the Dalian Commodities Exchange, the Zhengzhou Commodities Exchange and the Shanghai Futures Exchange, have lodged proposals to launch options on some of their contracts………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Global oil reserves have increased over the years despite oil production increasing significantly over the last four decades. Technological improvements permit greater unconventional oil production, claims Roland Berger Strategy Consultants.
Roland Berger Strategy Consultants examined the current status of the global oil market, providing insights into both, the demand and supply drivers that will impact oil price over the medium to long term. Unconventional reserves are now estimated to be 3.3 trillion barrels, compared to 2.6 trillion barrels of conventional oil. Oil demand is expected to continue growing over the medium term driven by growth across developing economies………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Iran’s oil exports are being ravaged by sanctions, but there are signs under the new president, Hassan Rouhani, that efforts to attract old clients may be boosting the Islamic republic’s most essential economic lifeline.
China, India and Japan, which account for half of Iran’s oil exports, all increased their purchases over the past several months, offering some new hope to Iran and complicating U.S.-led efforts to put pressure on Iran over its disputed nuclear program by attempting to cut off its main source of income………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Iran is reaching out to its old oil buyers and is ready to cut prices if Western sanctions against it are eased, promising a battle for market share in a world less hungry for oil than when sanctions were imposed.
New Iranian President Hassan Rouhani’s “charm offensive” at the United Nations last month, coupled with a historic phone call with U.S. President Barak Obama, revived market hopes that Iranian barrels could return with a vengeance if the diplomatic mood music translates into a breakthrough in the stand-off over Tehran’s disputed nuclear programme………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Some of the world’s most savvy energy investors have converged in a strange place the last few months. A place I call “the secret coast”, because little is known about the geology here, or the potential for discovery.
The place is Morocco—the far northern end of Africa. Now, it’s no secret there’s a lot of petroleum exploration going on in other parts of the African west coast. There’s been frenetic activity lately in Ghana, Gabon and Namibia (not to mention ongoing work in stalwart producing nations like Nigeria)………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

For decades, OPEC nations have, for the most part, enjoyed a good living. As long as oil prices remain high, they can recover billions of barrels of oil at relatively low cost and sell it to the rest of the oil-thirsty world.
But the North American shale oil boom is shaking things up for the cartel. In fact, the surge in U.S. and Canadian oil production resulting from the application of new drilling technologies threatens to reduce OPEC’s share of the global oil market this year to its lowest level in more than a decade………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Uncertainties continue to cast a shadow on the global marketplace. Uncertainty of economic growth, uncertainty over monetary policy changes and geopolitical instabilities (albeit abating) continue to confound commodity market participants including investors.
The US Fed may delay tapering for a few more months given the softer payroll expansion and with a still uncertain outlook for fiscal resolution. Obviously, an extension of QE would be welcome news for investors………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

This year’s drop in world gold prices has been deeply sobering for West African countries, from established producer Ghana to promising newcomer Ivory Coast, whose prospects of mineral wealth are being snatched away.
As miners’ stock prices plummet and they have to consider suspending or halting new projects, many fear the dream that inspired West Africa’s gold rush may be gone for good and regional economies may be in for an abrupt awakening………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

When asked why we invest in gold the standard answer often involves, ‘because it is a safe haven,’ or, ‘because it is a hedge against financial collapse.’ Often people base these statement on historical examples many hundreds of years old, but what about in recent history? Has gold proved itself in recent years? And when we talk about a safe haven, do we realise that it is not the same as a hedge?
I look at a paper that answers these very questions. As is so often the case in gold investment, the answers to above questions are not clear cut but the overall message remains the same: gold is both a hedge and safe haven………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Indonesia’s drive to displace the London Metal Exchange as the global benchmark for tin trading is whipsawing futures and leaving the most-accurate forecasters divided on the outlook for prices. Tin will average $25,000 a metric ton next year, 8 percent more than now, says Stephen Briggs, an analyst at BNP Paribas SA in London ranked by Bloomberg as the top forecaster over the past eight quarters.
Credit Suisse Group AG’s Andrew Shaw and Citigroup Inc.’s David Wilson, the next most accurate, predict averages of $21,750 and $22,375. Tin for immediate delivery was at $23,167 on the LME on Oct. 25………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

China accounts for about 40% of the global copper consumption and hence has a great influence on prices. China refined copper consumption rose to record levels in September and a modest uptick in sHFE stocks may suggest a supply surplus dynamics evolving, according to Barclays Research.
The critical question for the copper market and price performance is whether the strength of September’s apparent consumption can be sustained into Q4 2013. From a refined production perspective, September’s 45% y/y surge in copper concentrate imports, surpassing 1Mt to a new record, would suggest support for continuation of this trend………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

I have been asked a number of times, in the comments section of my articles over the last few months, about how I am able to track market sentiment. I know I have only alluded to how I track sentiment, but it is simply because the methodology I use is quite esoteric and mathematically based, and one in which the great majority of the market does not believe.
But, since so many of you have asked, I will try to explain it from a broader fundamental perspective………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Oil ETFs continued to decline and correct last week,with the oil spot price losing 2.93% to close at $97.90 per barrel and the United States Oil Fund ETF losing 3.10%. Energy ETFs started to lose as well after weeks of gains, with the Select Sector SPDR ETF losing .39%.
It is unusual from a fundamental standpoint that oil ETFs have been declining, due to the recent gains in equity markets. Economic data however has not been the best in the past few weeks, especially with the GDP losses due to the US Government Shutdown………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

During this earnings season, many companies have reported negative results from foreign-currency impacts, as a strong dollar has held back earnings power overseas. But more recently, the dollar has started falling in value. Smart investors want to know how to profit, and currency ETFs are one way to get exposure to the foreign-exchange market.
In the following video, Dan Caplinger, The Motley Fool’s director of investment planning, looks at currency ETFs. Dan notes that ETFs are generally set up to correspond to round amounts of foreign currency………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

The country’s top six national commodity bourses will open ‘muhurat trading’ session for two hours on Diwali which falls on November 3, according to the regulator Forward Markets Commission (FMC).
The commodity bourses — MCX, NCDEX, NMCE, ACE, ICEX and UCEX — are allowed to fix the muhurat trading session on November 3 (Sunday) from 6 pm to 8 pm in all commodities, FMC said in a circular. The exchanges are directed to inform brokers and traders in this regard, it said………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Investors are turning their focus back to China, after months in which global markets were driven by relentless speculation about the U.S. Federal Reserve’s next move.
Shares are climbing across Asia, and prices for industrial commodities such as copper and iron ore have bounced back amid signs that China’s economy is revving up. The yuan regularly sets record highs against the dollar as cash floods into the country………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

The dollar’s role as the world’s primary reserve currency helps all of us Americans by keeping interest rates low. Foreign countries buy United States Treasury debt not just as an investment, but because dollar-denominated assets are the best way to hold foreign exchange reserves.
This topic is on the minds of American small business owners I learned last week speaking to hundreds of store owners at an Ace Hardware conference. I was surprised by how many people button-holed me to chat on the subject………………………………………..Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

When the beginning of a timeline to eradicate the dual currency was announced this week, the two countries that converge on this Island reacted differently. The Cuba that lives only on its miserable wages felt that finally they had started to put an end date to an injustice.
They are those who cannot even have a photo taken on their birthday, pay for a collective taxi, nor imagine themselves traveling anywhere. For them, any process of unifying the currencies can only bring hope, because it couldn’t be any worse than it is now. The other country, in convertible pesos, received the news with great caution. How will the exchange rate change relative to the dollar or the euro?……………………………………….Full Article: Source

Posted on 28 October 2013 by VRS |  Email |Print

Leading Australian economists have given a resounding thumbs down to the Coalition’s direct action climate change policy, with one saying it would cause more economic disruption for a lesser environmental pay-off than an emissions trading scheme.
According to a Fairfax Media survey of 35 prominent university and business economists, only two said direct action was a better way to reduce Australia’s greenhouse gas emissions than an emissions trading scheme (ETS)………………………………………..Full Article: Source

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