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Commodities Briefing 14.Nov 2013

Posted on 14 November 2013 by VRS |  Email |Print

It is one of the more obscure anecdotes of pop music history: Bobby Fuller’s classic “I Fought the Law” was originally entitled, “I fought the idea of long-only commodity indices as an investment, and it won.” I bought the rights to the latter and the rest, they say, is history.
The idea that physical commodities as a group or individual physical commodities taken separately can offer some measure of protection against inflation and/or currency debasement has a lot of appeal on the surface, but really has none underneath………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Ask most Americans and they’ll tell you the oil markets are controlled by OPEC. But a recent lawsuit brought by four veteran floor traders alleges the global oil market is being manipulated from the waters off Scandinavia, not via the Middle East or Venezuela.
Specifically, ex-NYMEX board member Kevin McDonnell and three other floor traders allege BP, Shell, Statoil and the private trading firm Vitol are colluding to manipulate prices of Brent crude, the world’s benchmark energy price………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Kuwait Oil Minister Mustafa al-Shamali said Wednesday that he does not expect the OPEC oil cartel to change production at its next ministerial meeting in December. “I don’t expect it to be changed because the production till now goes with the needs of consumers and that’s enough,” Shamali told reporters outside parliament.
“I think it won’t be changed,” he said, but added that the decision will ultimately depend on a review of statistics by ministers of the 12-member Organisation of the Petroleum Exporting Countries at the meeting in Vienna meeting early next month………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Agence France-Presse reported Tuesday that the Organization of Petroleum Exporting Countries (OPEC) has increased its 2013 forecast for oil demand growth based on ” expectations of better-than-expected improvement” within developed country economies.
OPEC’s November monthly report projected that demand would increase slightly from October to 89.78 million barrels per day (mbpd). The slight 0.04 mbpd increase is allegedly a result of increase demand in Europe and North America, while non-OECD countries’ demand has slightly declined………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

The U.S. Energy Information Administration Wednesday reduced its forecast for world oil demand growth in this month’s Short-term Energy Outlook, while slightly lowering its outlook for supply from non-OPEC producers, in a month where U.S. output exceeded supply for the first in nearly two decades.
The agency also adjusted its prediction for prices of Brent and West Texas Intermediate crude this year, forecasting lower prices given the increase oil output from countries outside of OPEC. EIA said U.S. crude oil production increased to an average of 7.7 million barrels per day in October, the highest production for any October in 25 years, while oil imports were 7.6 million bpd………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

West Texas Intermediate crude rose on speculation that increasing refinery profits from making gasoline and heating oil will bolster use of the raw material.
Futures advanced 0.9 percent as the margin to turn crude into fuel, expressed by the so-called crack spread, climbed to the highest level since August. Gasoline jumped on forecasts that a government report tomorrow will show supplies fell for a fifth week. WTI’s discount to Brent oil widened to the most in seven months as unrest in Libya disrupted exports………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

What it must have been like, being one of those pioneers getting into the traditional oil industry back before all the biggest fields went into production. Well, we are back to this point again, only this time we’re in the deep waters and the shale.
There are five major oil and gas trends that have the ability to take us back to those first golden days of the industry, but the golden days won’t last forever and before we know it, deep-waters won’t look so deep, and the unconventional will become the new conventional………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Gold has long been a sought after commodity. Human history, such as the conquest of the Americas, has been defined by the quest to find gold mines and reserves. Now, however, the world’s gold mines may be becoming fully tapped.
Some experts even believe that all gold mines could become fully tapped within the next 20 years. This could have a dramatic impact on gold and bullion prices as while supply may run out, demand most likely will not………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Since writing a recent article suggesting that China’s Reserve Bank, the Peoples Bank of China (PBOC), has been building up its gold holdings, but without reporting this to the IMF we have been contacted by a Bloomberg research analyst, Andrew Cosgrove, who has, with his colleague Kenneth Hoffmann, been working on Chinese gold data, and who has come up with a somewhat similar conclusion.
In this case some specific figures have been developed in the research which do tie in well with Philip Klapwijk’s assertion that China has taken some 300 tonnes of gold into reserves in the first half of the current year………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

While gold has dropped 34 percent from its September 2011 record high, some experts say it has a good chance to rebound. Spot gold traded at $1,272 an ounce Wednesday morning, down from the all-time peak of $1,921.
Gold bulls say it represents a solid hedge against inflation, a weaker dollar and political and/or financial turmoil, The Wall Street Journal reports………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Is it time to rethink your gold investments? This question is being asked by those who have held on to their investments as the prices of the precious metal have come down significantly. It wasn’t too long ago when gold bullion prices soared beyond $1,900 an ounce; this year, they are facing scrutiny. Gold bullion prices witnessed plunges in April and June, and now sit close to $1,300, down more than 31% from their peak.
This decline in gold bullion prices has caused concern, and I completely understand why. For example, gold miners’ share prices have collapsed, both senior miners and exploration companies. With this in mind; I certainly think it’s time to rethink the gold investments that investors hold in their portfolio………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Silver prices should be underpinned by improving industrial demand in 2014, but they will tumble on gold’s coattails if the U.S. Federal Reserve begins tapering its stimulus, a top analyst at metals consultant Thomson Reuters GFMS said on Tuesday.
Strong investment demand in silver coins and exchange-traded funds, and Indian consumers’ substitution to silver from gold should provide support, said Andrew Leyland, manager of precious metal demand at Thomson Reuters GFMS………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Just a few short weeks ago, investors seemed pretty certain that there wouldn’t be a Fed taper in December. However, thanks to recent growth outlooks and an extremely strong jobs report, fears of an end of year reduction in bond purchases are creeping back into the picture.
After all, the latest jobs report crushed the consensus, according to Bloomberg , with nonfarm payrolls increasing by 204,000 month-over-month. Furthermore, there were plenty of strong revisions for previous months, suggesting that the labor market is holding up pretty well……………………………………….Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Steel demand makes big headlines because of the metal’s role in everything from buildings to automobiles and washing machines. However, every one of those also needs copper to make it work. And copper also goes into developed world staples like electronics. That’s why copper miners like Freeport-McMoRan Copper & Gold and Southern Copper Corp are worth a closer look.
Copper is used in the construction, electricity, transportation, and industrial machinery spaces, among others. These are some of the most important driving forces as countries develop………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Copper market could be in for a bear run if increased China production in the past two months and surplus refined copper forecast for 2013-14 by International Copper Study Group (ICSG) is any indication. US Copper futures has fallen to the lowest level since August at $3.191 a pound, a fall of 1.35% on Wednesday.
According to National Bureau of Statistics, China production of refined copper rose 2.9% month-on-month to a second straight monthly record and year-on-year gain of 22.9%. Refined copper production in October was 637,958 tons while in September it was 620,086 tons………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Natural gas futures prices continued their decline Wednesday, pinching fund investors betting on a recovery. Henry Hub natural gas for December delivery fell 5.1 cents, or 1.4% to $3.56 per million British thermal units on Wednesday, according to Dow Jones data.
Natural gas prices have declined roughly 19% since April, when they reached a high near $4.40. Year to date, natural gas prices are up roughly 6%………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Plans for a “new Scottish currency” must be set out in the long-awaited blueprint for ­independence later this month, Scottish Secretary Alistair ­Carmichael said. The SNP government’s white paper must also be clear about the costs of setting up a new Scottish state, as well as the price of pensions, he warned in a speech in Inverness.
First Minister Alex Salmond has said Scotland would use the pound in a “sterling union” with the rest of the UK after independence but Mr Carmichael insisted this “wouldn’t work”………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Kazakhstan has recently marked the twentieth birthday of the national currency, the tenge. Blogger Serikzhan Kovlanbayev presents [ru] a brief history of the tenge, showing how it has changed since 1993 and what is unique about it:
“A unique thing about the Kazakhstani currency is that it is “bilingual”, that is, the [tenge] carries texts in both Kazakh and Russian. There are no other currencies like this in the post-Soviet countries… Kazakhstan was also the last among the [former Soviet countries] to introduce the national currency………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Governments want to launch a platform at United Nations climate talks to help set common standards and accounting rules and tie together national and regional emissions trading schemes, but developing countries and green groups warned that talk of a global carbon market is premature.
Almost 200 nations are in Poland for a November 11-22 meeting to plan a 2015 U.N. deal in Paris that would start to tackle climate change in 2021………………………………………..Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

The Abbott government could pay $20 per tonne of carbon dioxide reduced under its new climate plan, three times the level expected under the emissions trading scheme (ETS) it seeks to dismantle, analysts Reputex said.
The Coalition government introduced a bill on Wednesday to scrap the previous administration’s ETS before it is due to take effect in mid-2015, saying the scheme would be too costly for businesses and households. ……………………………………….Full Article: Source

Posted on 14 November 2013 by VRS |  Email |Print

Global warming as a result of greenhouse gas emissions will be almost twice as intense as the United Nations’ 2035 target, according to the International Energy Agency (IEA), the energy arm of the OECD.
The IEA predicts that greenhouse gas emissions will rise by 20% over the next 22 years, creating temperature increases of 3.6 degrees, well above the UN’s prediction of a 2.0 degree-increase. The estimates are part of the IEA’s 2013 World Energy Outlook, which calls for an expansion of “carefully designed” alternative energy subsidies to the tune of $220 billion annually by 2035………………………………………..Full Article: Source

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