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Commodities Briefing 18.Nov 2013

Posted on 18 November 2013 by VRS |  Email |Print

Five years on from the aftermath of the Lehman Brothers collapse, how are we doing? To judge, this week Pure Speculation dusts off its November 2008 files. Back then, the short, sharp shock had done damage: on November 7, copper dropped $US516 a tonne in one day to $US3785. A year earlier it had been $US7480 a tonne.
Nickel had an even worse day on that Friday five years ago. It shed $US1803 a tonne in one session at the London Metal Exchange, closing at $US11,907. Zinc was at $US1096 a tonne………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

If you are worried about inflation, then it makes sense to look at investments that have historically performed well during periods of inflation. In a book called “Defying the Market,” authors Stephen Leeb and Donna Leeb research how well investments, including stocks, real estate and commodities, held their value during the 1970s when the CPI averaged a nominal rate of 8%.
A key factor for this increase has to do with negative real interest rates. Whenever a country has negative real rates, meaning the inflationary rate (CPI) is greater than the current interest rate, gold tends to rise in that country’s currency as investors seek a better store of value………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

A lot has changed for Big Oil in the past 10 years, but how much has the shale boom shifted the rankings of the world’s 20 biggest oil and gas companies? We compared today’s giants with data from 2003. Who do you think is on top?
Ten years ago there was no Facebook, no Twitter, no iPhone. If you wanted a smart phone back then your best option was a Blackberry that now looks as antiquated as an eight-track player. Back in 2003 George W. Bush declared “Mission Accomplished” in Iraq………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The Bakken crude oil formation spread out over North Dakota and Montana should give up more than 1 million barrels of oil per day next month. North Dakota is already the second-largest crude oil producer in the country behind Texas.
A string of reports out last week said oil production in states like North Dakota is putting a dent in OPEC’s market influence. A break from the grips of Middle East oil producers was put on the U.S. table 40 years ago and politicians and pundits alike are heralding recent developments as an energy revolution. What develops after the revolution is over, however, is something policymakers may have to consider in the not too distant future………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The Organization of Oil Exporting Countries — better known as OPEC — has been a dominant player in the oil market since it was formed in 1960. The 12 member countries have provided over 40% of the world’s oil over the last 20 years alone, giving them the ability to move prices up or down at a moment’s notice.
Even a rise in U.S. oil production over the past eight years has barely made a dent in OPEC’s global oil dominance………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The new ‘World Oil Outlook’ report from Opec, according to its secretary-general Abdullah Salem Al Badri, “aims to share Opec’s views on the world’s energy prospects, and its associated challenges and opportunities.” The report, in its seventh edition, “discusses the principal issues that could shape the future of the global energy markets, particularly in relation to oil.”
The report assumes oil prices to remain stable in the long run as the rising cost of the marginal barrel would prevent their drop and, therefore, in nominal terms, a $110 per barrel on average up to 2020 and then rising gradually to $160 a barrel by 2035…which is only $100 a barrel in real terms………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

Shale will not significantly boost oil production or bring down prices in the long term, according to the International Energy Agency (IEA). The surprising findings are contained in the latest version of the agency’s annual World Energy Outlook (WEO).
Worldwide production of light tight oil (LTO) from shale and other formations requiring fracking is expected to grow from 2 million barrels per day in 2012 to just 5.8 million bpd by 2030, before declining slightly to 5.6 million bpd in 2035………………………………………..Full Article: Source

Posted on 18 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 18 November 2013 by VRS |  Email |Print

The global coal industry will court controversy on Monday by insisting that the world’s most abundant fossil fuel can play a part in curbing greenhouse gases through the use of new technology at power plants.
The World Coal Association, representing most of the largest companies in the sector, says its call for more government support for research to make coal burning more efficient is an answer to “policy fatigue” surrounding climate change talks………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The uncertainty surrounding the timing of the US Fed tapering (reduction in the US asset purchase) decision continues to haunt the world commodity markets. Admittedly, the decision will be data-driven and recent data have raised expectation of a Fed tapering as early as December or as late as March 2014.
But the decision not to begin tapering in September resulted in some positive positioning in the market; but such positioning has by now fizzled out, experts have pointed out based on release of latest CFTC data relating to commitment of traders………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

Gold investors who are worried by the downward spiral of prices for the yellow metal over the past year have focused their attention almost entirely on guessing when the US government will start to taper down its monthly $85bn (£53bn) asset-purchase programme.
Gold investors who are worried by the downward spiral of prices for the yellow metal over the past year have focused their attention almost entirely on guessing when the US government will start to taper down its monthly $85bn (£53bn) asset-purchase programme………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

Billionaire hedge fund manager John Paulson, who cut his gold holdings by more than half in the second quarter, maintained his bet on the metal over the next three months as prices rebounded.
Paulson & Co, the largest investor in the SPDR Gold Trust, the biggest exchange-traded product for the metal, held 10.23 million shares as on September 30, unchanged from June 30, according to a government filing on Thursday. Billionaire George Soros took a stake in the Market Vectors Gold Miners ETF………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

Investors got less bullish on gold as hedge funds doubled their short holdings just before prices erased a weekly loss and Janet Yellen pledged to press on with economic stimulus if confirmed as Federal Reserve chairman.
The net-long position in gold slumped 37 percent to 55,456 futures and options in the week ended Nov. 12, U.S. Commodity Futures Trading Commission data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid-August, from 26,490 a week earlier. Net-bullish wagers across 18 U.S.-traded commodities dropped 12 percent to 576,224 contracts as investors became more bearish on wheat and cut their silver holdings by the most in five months………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The blogosphere seems to have gotten the idea that I am predicting $1,000 as a sure thing. Nothing could be further from the truth. I’ve said many times in the past that I think there are parties trying to push gold to that level. Will they succeed is anyone’s guess, but I think they are clearly trying. I also believe that the bear market this past year was an artificial and manufactured move.
I’ve been very clear. On Sept 3 I recommended everyone exit all long positions in the metals and go to cash until gold either confirms that the bottom was formed on June 28, or it makes it back down to $1,030. That is the point where one could back up the truck so to speak………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

We are aboard a speeding train that cannot speed up - neither can it slow down - due to fiat, default, and what will be remembered as the greatest credit fiasco in history. And the road is ending just up ahead. You can’t go back and you can’t stand still…
Speed is a 1994 American action-thriller movie directed by Jan de Bont. The film stars Keanu Reeves, Dennis Hopper, Sandra Bullock and Jeff Daniels. The movie hinges on a bus rigged with explosives that will be armed if the bus exceeds 50 miles per hour. The explosives will detonate if the bus falls below that speed or if an attempt is made to offload the passengers………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

With excess crude steel production, over capacity and weak demand, steel industry continues to be in the doldrums but opinions differ on how soon the market may witness recovery. Performance of Tata Steel, India’s largest steel maker gives some room for optimism in the near term.
According to World Steel Association (worldsteel), crude steel production in September rose 6.1% on a year-on-year basis at 133 mn tons although production in the first nine months rose by 2.7% compared on an annualised basis.China’s crude steel production for September 2013 was 65.4 Mt, up by 11.0% compared to September 2012………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

An unconstrained global fund offers the most effective way to access the commodities story, according to head of FE Research Rob Gleeson, who thinks everyday investors should avoid physical commodities funds and ETFs.
Gleeson thinks there are plenty of reasons to be interested in investing in commodities, but says that holding them directly is a high-risk strategy, illustrated by the terrible time many have endured in recent months………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

The turnover of the commodity exchanges fell by 30 per cent to Rs 71,60,162.84 crore in the first seven months of this fiscal due to sharp fall in trading volumes in most commodities, according to the Forward Markets Commission (FMC).
The business at these bourses stood at Rs 101,55,637 crore in the same period last year, the commodity markets regulator FMC said in its latest report………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

With its linked trade and innovation deficits, the UK seems as unprepared as it was for real war in 1939. Rumours of war are in the air. Currency war, that is. The US treasury has forged an alliance with Brussels to attack Germany’s beggar-thy-neighbour approach to the rest of the eurozone. Last week the Czech government said it would defend its economy by driving down the value of the koruna, following the aggressively interventionist example of Japan and Switzerland.
It’s not hard to see why the atmosphere is becoming less cordial. This is a low growth world marked by over-capacity. Wages are under downward pressure and this is leading to ever-stronger deflationary pressure ……………………………………….Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

One of the easiest ways for a company to boost sales is to the cut price of its goods and services. If a business can increase the number of units it sells by more than it loses through the cut in price, then it should rake in more revenues.
Of course, there are other ways to increase turnover. A company could go out and seek new markets or it could even develop new and more innovative products, which could also boost the top line. But those strategies can take time………………………………………..Full Article: Source

Posted on 18 November 2013 by VRS |  Email |Print

Bill Shorten will confirm the battlelines on the repeal of the carbon tax this week, using amendments to the government’s legislation to insist on the introduction of an emissions trading scheme by July 1 next year and the retention of the Climate Change Authority.
The Opposition Leader’s conditions, which include a legal cap on carbon emissions and stopping cuts to renewable energy research, will be rejected by the government………………………………………..Full Article: Source

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