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Commodities Briefing 13.Nov 2013

Posted on 13 November 2013 by VRS |  Email |Print

A peak in global industrial production is likely to place downward pressure on industrial commodity and gold prices for the foreseeable future, according to a Credit Suisse Group AG research note released on Tuesday.
In particular, Chinese industrial production has peaked, with a potential modest slowdown expected in the coming months. That could drag down prices for industrial metals like copper and iron ore, as Chinese exports have also stagnated………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

It’s not all China’s fault. I’m referring here to the rout in prices of commodities, ranging from coffee to zinc, over not only the course of 2013 but much of the last three years. The Dow Jones-UBS Commodity Index has tumbled 13.1 percent over the last year.
Another index of stocks whose fate is tied to commodities (the Morgan Stanley Commodity Related Equity index) is ahead 10.2 percent in the same period, just over a third of the 28 percent gain recorded by the S&P 500 in the same period………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

The International Energy Agency has said the fuel map of the globe is changing rapidly on a vast upheaval of energy markets. It forecast widening regional differences in energy costs, with an impact on competitiveness.
In its global energy demand outlook, the IEA said Tuesday that new reserves of fossil fuels, notably resources of shale in the US and Canada, would compensate for the decline of existing conventional gas and oil fields, raising the competitiveness of nations which used them………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

The United States will stride past Saudi Arabia and Russia to become the world’s top oil producer in 2015, the West’s energy agency said, bringing Washington closer to energy self-sufficiency and reducing the need for OPEC supply.
But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will regain its dominance - especially as a supplier to Asia, the International Energy Agency (IEA) said on Tuesday………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

OPEC’s production remains higher than next year’s global requirement for its crude, the exporter group said on Tuesday, even after Saudi Arabia cut production from a record high level.
The monthly report from the Organization of the Petroleum Exporting Countries adds to signs that increasing supply from the United States, enjoying a shale energy boom, and other non-OPEC countries will weigh on OPEC’s market share in 2014………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

The International Energy Agency has sounded the alarm about a potential oil supply crunch and higher prices as key Gulf producers delay investment in the face of surging US shale output.
In a strident warning against complacency in the oil market, the developed world’s energy body said key Gulf producers have been adopting a “wait and see approach” to investment, because of the perception that the US shale revolution would produce an “abundance of oil”………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

The OPEC oil cartel has increased its forecast for oil demand growth in 2013 on expectations of better-than-expected improvement in developed country economies. The Organization of Petroleum Exporting Countries said in its November monthly report on Tuesday that demand would average 89.78 million barrels per day (mbpd) in 2013, a slight 0.04 mbpd increase from last month’s forecast.
Most of the demand increase came from small adjustments in Europe and North America with non-OECD countries seeing demand forecasts in a slight decline………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Brazil is set to become a net oil exporter and top 10 producer from 2015 if it overcomes hurdles to developing its giant offshore discoveries, the West’s energy agency said on Tuesday.
In its 2013 World Energy Outlook, the International Energy Agency (IEA), which advises large industrialised nations on energy policy, said Brazil could play a major role in supplying the world’s energy needs in coming decades, though its rise would hinge on its ability to develop its resources………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Saudi Arabia is just about the only energy producer so far unaffected by the shale revolution. Yet despite appearances, Saudi Arabia’s financial and oil market strength is brittle. Saudi policymakers must successfully deal with a series of problems by the end of the decade.
Individually, each of the problems should be easy to manage, but in combination they could amount to a “perfect storm” that presents the kingdom’s leaders with the most difficult challenge since the collapse in oil prices in 1998………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

China is expected to build more renewable power plants through 2035 than the U.S., European Union and Japan combined, according to the International Energy Agency.
The share of energy sources including hydropower, biomass, wind and solar in world electricity supply will rise above 30 percent in that period, “drawing ahead of natural gas in the next few years and all but reaching coal as the leading fuel for power generation in 2035,” the Paris-based adviser to 28 nations said in its annual World Energy Outlook report………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Wholesale gold bumped up to $1285 Tuesday lunchtime in London, reversing an overnight drop to fresh 3-week lows at $1277 as European stock markets slipped with government bond prices. “A slip through the six-month support line at $1270.16 will confirm our bearish outlook,” says Commerzbank’s Axel Rudolph.
“We could potentially,” says French bank Natixis’ precious metals analyst Bernard Dahdah, “see gold prices reach levels of $850 to $1,000. But this is our very low-case scenario.”……………………………………….Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Investors have started to return to gold as a hedge against any potential disruption to the continued rally in world equity markets.
Gold has fallen significantly over the course of 2013, dropping from $1,675.35 an ounce at the start of the year to a low point of $1,200 towards the end of June. The price has recovered slightly since then to reach around $1,280 today………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Gold Prices bumped up to $1285 Tuesday lunchtime in London, reversing their overnight drop to fresh 3-week lows at $1277 as new data showed small business sentiment in the US falling hard in October.
Gold price charts analyzed by Commerzbank’s technician Axel Rudolph, however, say that “a slip through the six-month support line at $1270.16 will confirm our bearish outlook,” he writes today. “We could potentially,” says French bank Natixis’ precious metals analyst Bernard Dahdah, “see gold prices reach levels of $850 to $1,000. But this is our very low-case scenario.”……………………………………….Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

BNP Paribas thinks gold is getting closer to the precipice. How quickly it’s likely to be pushed over will be determined by the rate at which producers accelerate their hedging activity. From BNP’s commodity markets strategy group on Monday:
Investor demand in the form of physical ETF holdings remains lacklustre. And if commitment of trader data for gold futures show a rebound in net long positions held by money managers, it is hardly enough to write home about………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

With domestic gold prices on the rise, there has been an increase in redemptions of gold exchange traded funds (ETF) in recent times. But it is not the time to exit the yellow metal just yet, as prices are likely to remain firm on the back of a weak rupee, say experts.
Domestic gold prices are rising on the back of a weak rupee and are currently hovering around Rs 30,845 per 10g. This has seen gold ETFs post a return of 8.34 per cent on average over a six-month period, according to data from Value Research Online………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Platinum prices could strengthen as the market experiences a growing disparity between supply and increased global demand in autocatalyts, jewelry and exchange traded fund investments.
Johnson Matthey, a precious metals refiner, estimates that gross demand for platinum could hit a record 8.42 million ounces this year, or up 4.8% year-over-year, due to strong industrial and South African investment demand, reports Neil Hume for Financial Times………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Platinum demand will exceed supply by the most since 1999 this year as more industrial purchases and investment outweigh slower buying by jewellers and carmakers, Johnson Matthey Plc said. Palladium’s shortfall will narrow as consumption falls faster than supply.
While car manufacturers will buy less platinum for the first time since 2009, more demand from chemical, electrical and glass industries and record investment will widen the shortage by 78 percent to 605,000 ounces, London-based Johnson Matthey said today in a report………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

President Barack Obama is nominating a top Treasury Department official to run the independent agency that regulates the futures and options markets.
The White House says Obama will announce the nomination of Timothy Massad to head the Commodity Futures Trading Commission on Tuesday. For the past three years, Massad has overseen the Troubled Asset Relief Program, the bank rescue plan known as TARP………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

The euro slid by 1.5 per cent after the European Central Bank cut a key interest rate last week, saying it hoped to stimulate the economy and head off deflation.
The U.S. is more than two years into a program of quantitative easing without a sign of tapering and now more countries are moving to deflate the value of their currency, among them New Zealand, Australia, the Czech Republic and Japan………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Canada’s dollar reached the weakest in more than two months on speculation a strengthening U.S. economy will prompt the Federal Reserve to reduce stimulus measures that have helped to bolster growth worldwide.
A measure of the currency’s volatility rose to a one-month high, while crude oil, Canada’s largest export, dropped to the lowest level since June. The U.S. dollar rose against the majority of its 16 most-traded peers after reports last week showed American payrolls and gross domestic product grew more than forecast. The U.S. is Canada’s biggest trade partner……………………………………….Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

South Sudan has devalued its pound currency against the dollar by 34 percent to bring it onto a par with the black market rate, a move that risks fanning inflation.
South Sudan has had a currency problem ever since it gained independence from Sudan in July 2011. Its oil exports have been disrupted by disputes with Khartoum, as well as by endemic corruption, leaving it struggling to pay for the food and other imports that it depends upon………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

Indonesia, one of the world’s biggest emitters of greenhouse gases, is planning to launch a voluntary carbon trading scheme that could link to other countries if successful, a senior government official said on Tuesday.
The South East Asian nation is lining up carbon trading as one of several policies to cut its fast-growing greenhouse gas emissions, according to Dicky Edwin Hindarto, head of the carbon trade department at Indonesia’s National Council on Climate Change………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

European Union lawmakers will fast track a bill to cut the supply of carbon permits, an EU lawmaker and an official said on Tuesday, potentially enabling it to be adopted next month.
Lawmakers already fully agree on the backloading bill - a one-off intervention to delay the sale of 900 million carbon permits under the EU Emissions Trading Scheme (ETS) until later this decade, they said………………………………………..Full Article: Source

Posted on 13 November 2013 by VRS |  Email |Print

First, the growth in demand for commodities is because many African governments subsidise basic commodities such as petrol and wheat. Second, a country such as Nigeria produces 2.5m barrels of crude oil per day, consumes 300,000b/d but imports about 80 per cent of its refined products from the commodities trading houses.
Third, until the early 1970s, Nigeria was self-sufficient in rice, but it abandoned production, using petrodollars to buy rice on the international market………………………………………..Full Article: Source

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