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Commodities Briefing 13.Jan 2014

Posted on 13 January 2014 by VRS |  Email |Print

For a major part, the year 2013 was characterised by several uncertainties covering global economic growth, geopolitics, monetary policy, currency dynamics and weather.
Mercifully, the current year has begun with a somewhat clearer picture. Although still not really back to trend, global economic growth has begun to gather momentum under the lead of the US. Geopolitical tensions stand substantially reduced although there is always an undercurrent of uncertainty………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

2014 could prove to be a fairly positive year for commodities according to Barclays, with global growth expected to move higher and the pace of commodity supply growth likely to ease. Tapering is unlikely to depress commodity prices, especially if expectations of stronger US growth come to fruition.
The exceptions to this are gold and silver prices, which are likely to head lower as tail risks fade. On a relative sectoral basis, Barclays view base metals more positively vis-á-vis precious metals. Supply risks are likely to dominate metals markets with Indonesia’s ore export ban to be implemented from 12 January………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Hedge funds cut their bullish commodity wagers by the most in seven weeks before prices dropped to an eight-month low on signs of surplus supply and slowing economic growth in China.
The net-long position across 18 U.S.-traded commodities fell by 11 percent to 678,885 futures and options in the week ended Jan. 7, U.S. Commodity Future Trading Commission data show. Investors are the most bearish on wheat ever and anticipate lower prices for corn, coffee, sugar and soybean oil. Bullish gold wagers rose to the highest since mid-November………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Kuwait’s oil minister Ali al-Omair said the OPEC member targets 3.5 million barrels per day capacity by 2015. Balance in global oil markets takes precedence over the crude price, Kuwait’s new oil minister said on Sunday.
Asked whether 100 dollars a barrel was a good price for oil, Ali al-Omair told reporters at a reception: “The issue of balance comes before the issue of price.”…………………………………Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Energy companies will spend close to $1 trillion on oil and gas infrastructure and storage over the next decade, to support more than 900,000 US jobs as the US becomes the global leader in oil production capacity growth, according to a new report from the American Petroleum Institute (API).
The report, conducted by IHG Global, estimates that between $85 billion and $90 billion of direct capital will be invested this year alone to build new pipelines, storage and processing facilities, and rail cars and marine vessels needed to transport oil and natural gas across the country………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Hedge funds became less bullish on crude oil for the first time in six weeks as U.S. inventories of fuel expanded at a time of weakening demand.
Money managers cut net-long positions, or wagers on rising prices, for benchmark West Texas Intermediate crude by 8.6 percent in the week ended Jan. 7, U.S. Commodity Futures Trading Commission data show. It was the biggest decline since June. Short positions gained the most since April………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Copper may be the red metal, but gold is where investors fear a bloodbath. Gold miners, walking wounded already, won’t escape it. Some, though, are better prepared than others.
Gold miners usually reassess their reserves annually. Years of rising prices boosted the value of ounces in the ground, as well as making lower-quality ore bodies profitable to mine, expanding reserves………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

2013 was one of the worst years for gold in a generation and the strangest part of it is that this loss came during a time in what should have been a banner year for gold.
When the Fed launched its QE1 and QE2 programs, gold posted huge gains but with QE3, we only had a brief rally in late 2012, it’s been all downhill for there………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

People buy the precious metal for diverse reasons, making it impossible to draw blanket conclusions about the soundness of such investments. Before embarking on a bling fling, you might heed the advice of the World Gold Council and study prudent options available to investors.
The World Gold Council, the UK-based industry association, recently consolidated its operations on China’s mainland to reduce costs and improve efficiency. Shanghai has become the group’s regional head office for the Chinese mainland, Hong Kong, Macao and Taiwan, while its existing Beijing office remains open, Albert Cheng, managing director of the council for the Far East, told Shanghai Daily in an exclusive interview in December………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Chinese copper consumption may go up this year as the state grid forecast a 13% increase in spending. The power sector accounts for more than 40% of Chinese copper demand, and outsized spending in 2013 helped tighten the Chinese market for most of the year, said London based Barclays in its recent market analysis.
“The new target exceeds our expectations and suggests that copper demand from the power sector could stay as strong, if not stronger, in 2014,” the bank said………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

The rapid growth of the exchange-traded fund industry offers an excellent range of products for diversification, but investors need to beware the risks. The “do nothing” investment portfolio is every investor’s dream. Simply buy low-cost funds that replicate an equity index, corporate bonds and UK gilts, then sit back and ignore the daily gyrations of the stock market, safe in the knowledge that over time the investments will win out.
The rapid growth and extensive range of new exchange-traded funds, or ETFs, has brought this nirvana a step closer for many. The global ETF industry has grown into a $2.4 trillion (£1.45bn) behemoth, with the top four providers dominating nearly three-quarters of the market………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

BlackRock pipped its arch rival Vanguard to the winning post as the race between exchange traded fund (ETF) providers for investors’ cash in 2013 culminated in a photo finish.
Less than $1 billion of inflows separated the first- and third-largest ETF providers by assets respectively, after a year in which Wall Street’s surge to an all-time high provided a significant boost to many US ETF managers. In comparison, growth for European-based ETF managers was disappointing as they lost market share to their US rivals………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

An Iranian central bank official says that Iran has once again delayed plans to revalue the Iranian riyal by eliminating some zeros from the country’s currency, although the option remains on the table.
“The issue will be included in the central bank’s serious agenda as soon as the economic situation has improved and the inflation reduced,” said Akbar Komijani, the Central Bank of Iran’s economic deputy, in an interview with the Mehr news agency published on Sunday………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

For a brief moment in 2007 Gisele Bündchen became the fetching face of dollar doomsayers, when her agent revealed that the Brazilian supermodel would prefer to be paid in euros rather than the struggling US currency.
At the time it seemed like a sensible move. Dollar-bashing was all the rage. Even rap stars waved wads of euros instead of the usual “Benjamins” – $100 bills. But after the onset of the financial crisis in 2008, the dollar defied the sceptics as investors swallowed misgivings and dived into everyone’s default safe place: US government bonds. Even as the Federal Reserve printed $2.5tn to prevent a financial collapse, the dollar stayed stable………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

As more bitcoin operators shut shop in India on fears of regulatory and enforcement actions, some large corporates are believed to have begun lobbying hard with regulators and government departments in favour of ‘digital currency’.
While none of these groups are as yet into bitcoin business, some of them may be interested in setting up their own ‘virtual currency’ platforms, a senior official said………………………………….Full Article: Source

Posted on 13 January 2014 by VRS |  Email |Print

Analysts predict the value of trades in the carbon markets will rise for the first time since 2011. The value of the global carbon market is forecasted to rise to €46bn in 2014. While a rise of 15% from last year, this is well below €98bn high it hit in 2011.
Bloomberg New Energy Finance analysts predict carbon prices will rise more than 50% to an average €7.5 per tonne from just shy of €5 now, all down to the EU’s delay of carbon allowances under the EU Emissions Trading System………………………………….Full Article: Source

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