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Commodities Briefing 08.Nov 2013

Posted on 08 November 2013 by VRS |  Email |Print

Investors are keeping a keen eye on China this week as the world’s second-biggest economy gears up for its Third Plenum of the Communist Party. The summit of China’s leaders is expected to deliver some of the biggest reforms for the country in 35 years.
China is the one of the world’s biggest producers and consumers for a range of commodities. In ranks number one in the steel and coal industry, according to the World Coal Association, as well as in iron ore, according to the U.S. Geological Survey. The Copper Development Association state it’s the world’s second biggest producer of copper, behind Chile. Commodities are a big deal for the biggest population on the planet, and prices have risen in the last 10 years with China the underlying driver of this “super-cycle”………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

For the last three years, the bottoms of coal stocks have been predicted several times. Nevertheless the coal stocks went up temporarily and then continued its bearish trend. Many coal companies could go bankrupt. I bet most of them will not offer one of the best appreciation potential, but I do not go that far to proclaim it is one of the best deals in our generation.
Many experts believe natural gas would replace coal to generate electricity. The impact of natural gas will be even clearer by 2016. That may be true in the USA, but not in China and many countries. Even with all the nuclear generators on-line in ten years (2023), China will still depend on coal to generate more than 60% of its electricity………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Successful investing in any market requires a strategy but commodities have generally provided negative returns this year and hence investors could be worried on what strategy to take. But before moving into a discussion of strategy options before traders and investors,let us look at the global economic scenario as outlined by Standard Chartered Bank in its report on Supercycles.
Stanchart believes that the third super cycle which began in 2000 is still intact and it is being driven by growth in emerging market economies. The first super cycle lasted from 1870-1913, the second one from 1946-73 and the world experienced slower growth in 1974-2000 due to Oil crisis and several crises that hit developing nations………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Russia forecast on Thursday that oil prices would remain flat in real terms through to 2030, taking a more bullish view than many independent forecasters who expect an exploration revolution to deliver ample supply and depress prices.
After taking inflation into account, the price of crude oil and other commodities will remain roughly unchanged over the period, the government said in its revised long-term forecast for Russia’s $2 trillion economy………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Opec has increased its forecast for long-term global oil demand for the first time in six years, after reassessing the prospects for car ownership in China.
After several years of revising down its estimates for oil demand in the face of anaemic economic growth, the Vienna-based organisation raised its forecast for demand to 108.5m b/d by 2035, up from 107.3m b/d in last year’s report………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Opec upgrades oil demand forecasts on expectation of 380 million new cars on China’s roads by 2035 and says world needs to invest nearly $8 trillion on new energy facilities. Petrol prices are unlikely to fall significantly anytime soon based on the latest long-term projections for the global oil market released by the Organization of Petroleum Exporting Countries (Opec).
The group of 12 major producing nations estimates that meeting increases in world oil demand through to 2035 will require $7.5 trillion (£4.6 trillion) worth of investment into building new infrastructure such as production plants, refineries and pipelines………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Everyone has fears, and OPEC is no different. OPEC should be scared, real scared, of America’s oil boom. In a previous article I pointed toward the Bakken and the Permian Basin about to bring online an additional 2 million barrels of crude oil output a day by 2025, which will probably be higher because that implies the Bakken hitting and plateauing at 1 million bpd, which in reality it will probably surpass.
Continental Resources has been able to drill deeper laterals to increase the amount of recoverable oil per well by around 40-60% in the Bakken. The Bakken and the Permian Basin has OPEC scared, but there are other plays out there that have OPEC tossing and turning at night………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will increase crude exports through the end of this month as shipments from Saudi Arabia and Iraq recover before the northern hemisphere’s winter season, according to tanker tracker Oil Movements.
OPEC, which supplies about 40 percent of the world’s oil, will increase sailings by 350,000 barrels a day, or 1.5 percent, to 23.92 million barrels in the four weeks to Nov. 23, the researcher said today in a report. That compares with 23.57 million in the period to Oct. 26. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

With the fragmentation of the gold market, as we’re describing in this series on the gold market, the gold price is not reflecting the true balance of demand and supply. It’s reflecting the balance of the demand and supply that’s routed through London and other developed world markets and distribution systems.
This doesn’t represent the entire gold market, and yet gold prices paid between buyers and sellers in the entire gold market are still referenced to the developed world gold markets, particularly the London Gold Fixings………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Gold reversed sharply to the downside at the start of September, through the rising trend line of a corrective channel. As we know that’s an important signal for a change in trend, which means that bearish price action is now back in view that could accelerate to the downside in the next few weeks if we consider possibly completed flat correction in wave 2.
A fall and daily close beneath 1251 is needed for a wave 3 down back to 1180………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Copper analysts are the most bullish in eight months, joining hedge funds betting prices will gain on stronger demand from China, the biggest buyer. Eighteen analysts surveyed by Bloomberg News expect prices to rise next week, seven are bearish and seven neutral, the largest proportion of bulls since March 8.
Money managers and other speculators held a net-long position of 10,297 contracts on Oct. 29 after betting on lower prices as recently as September, the latest U.S. Commodity Futures Trading Commission data show. They were bearish from February to August………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

A new investment-grade bond exchange-traded fund from ProShare Advisors LLC is embedding interest-rate protection to accommodate investors who expect rates to rise as the Federal Reserve curbs its unprecedented stimulus.
U.S. government bond futures will be used to hedge against rising interest rates in the ProShares Investment Grade-Interest Rate Hedged ETF, which will aim for zero duration, Bethesda, Maryland-based ProShares said………………………………………..Full Article: Source

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Posted on 08 November 2013 by VRS |  Email |Print

Imagine being able to access an exchange traded fund or multiple ETFs that provide access to the equities of a large, advanced, export-driven Asian economy with currency hedge kicker.
Investors already have three such options Japan ETFs. The new WisdomTree Korea Hedged Equity Fund gives investors the first hedged currency play on South Korea, Asia’s fourth-largest economy. DXKW debuted Thursday, becoming WisdomTree’s sixth hedged currency ETF………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Farmers produce food, not carbon. Yet, if some of the governments and corporate lobbies negotiating at the UN climate change conference to be held in Warsaw from 11-22 November have their way, farmland could soon be considered as a carbon sink that polluting corporations can buy into to compensate for their harmful emissions.
”We are directly opposed to the carbon market approach to dealing with the climate crisis,” says Josie Riffaud of La Vía Campesina. “Turning our farmers’ fields into carbon sinks – the rights to which can be sold on the carbon market – will only lead us further away from what we see as the real solution: food sovereignty. The carbon in our farms is not for sale!”……………………………………….Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

Carbon emission permits in China’s fledgling CO2 markets will trade below $5 a ton in initial years, lower than the crisis-hit European market, a survey found on Thursday. Consultancy Climate Bridge’s survey found companies expected trade to be hampered by a lack of regulation.
The world’s biggest-emitting nation, China is launching pilot markets in its regions as a first step to building a national emissions trading scheme to rein in its output of heat-trapping gases blamed for causing climate change………………………………………..Full Article: Source

Posted on 08 November 2013 by VRS |  Email |Print

EU carbon was little changed in nervous trade on Thursday that failed to match gains in other asset classes, which were spurred by a surprise interest rate cut by the European Central Bank.
The front-year EU Allowance closed at 4.80 euros on ICE, a gain of 2 cents but below the week’s ceiling hit on Wednesday of 4.89 euros. The benchmark carbon contract was trading at 4.77 euros before the ECB’s decision to reduce its main refinancing rate to record low of 0.25 percent but rose only slightly amid lower-than-average turnover………………………………………..Full Article: Source

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