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Commodities Briefing 18.Feb 2014

Posted on 18 February 2014 by VRS |  Email |Print

The price of energy and gold has been moving higher for various reasons; from the cold weather, where a surge of demand pushed up prices, to the improvement of global economic growth this year.
WTI prices were trending lower at the end of last year on increasing stockpiles; this jump has been attributed to the cold weather disrupting production at a time when demand is rising. The EIA lowered forecasts for US oil production this year and next, after the ‘severe weather this winter has caused temporary slowdowns in completing new wells’………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

The price of oil extended gains above $100 a barrel Monday as a rebound in Chinese credit growth suggested steady demand in one of the world’s largest petroleum consumers.
Benchmark U.S. crude for March delivery was up 47 cents to $100.77 a barrel at 0630 GMT in electronic trading on the New York Mercantile Exchange. The contract fell 5 cents to close at $100.30 a barrel Friday………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Shaking off some of the restrictions of international sanctions, Iran managed to boost its oil exports by 100,000 barrels per day in January. According to the IEA, Iran was able to export 1.32 million barrels per day last month, with the increased flow going to China, Japan, and India.
To be sure, Iran used to export 2.5 million barrels per day before sanctions were implemented in 2012, but the interim nuclear deal with the United States and its western allies has breathed some life into Iran’s oil sector. It removes the requirement of buyers of Iranian crude to further reduce purchases in order to avoid penalties. The value of Iran’s exports at current prices is worth about $4 billion per month………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Before we delve into the wider aspects of WTI crude oil, let us just get into the real reasons behind the Barclays’ belief that the said variety is poised to maintain a level above $95/bbl in the days to come. In fact, the bank rules out the possibility of WTI exhibiting any weakness in the first quarter of 2014, thanks to the healthy nature of US crude oil demand and the situation of product inventories.
The bank notes in a report that PADD II (Petroleum Administration for Defense Districts II) refinery runs stand close to 94% of capacity even as the maintenance for refineries in the said district is low for Q1: the figure runs into 30,000 barrels/day………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Barclays is of the opinion that storage deficit in natural gas, when compared to last year would start narrowing by the end of February even as the temperature by that time, beginning its climb from the second half of the month, would put pressure on the prices.
This is to be read in the context of the visible expectation that “sustained prices at about $5/MMBtu will…further decrease natural gas’s competitiveness against coal in the power stack.”……………………………………….Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Australia will review its mandatory renewable energy target (RET), the government said Monday, sparking concerns among green groups that a weaker target could pave the way for new coal plants and increased pollution.
The target to ensure Australia generates 20 percent of its electricity from renewable sources in 2020 has been a boon to the nation’s wind and solar producers, but has been blamed by the conservative Coalition government for increasing power prices………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Gold hit a 3.5 month peak on Monday as fears over U.S. economic growth and a weaker dollar added to the metal’s safe-haven appeal, extending its gains after rising the most in six months last week.
Market sentiment towards gold has been positive since the beginning of the year as weak U.S. and China economic data, and emerging market jitters have taken a toll on global equities, spurring demand for bullion - often seen at times of uncertainty as a safe haven………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

The two most-accurate gold forecasters are holding to their bearish forecasts for 2014 even after the metal posted its best start to a year since 1983. Futures rose 9.7 percent in 2014 through Feb. 14, rebounding from the biggest annual drop in three decades, and reached a three-month high.
Holdings in exchange-traded products backed by bullion increased by 3.2 metric tons last week, the most since December 2012, after slumping 869.1 tons last year when prices slid 28 percent………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

The gold price continued to build on recent gains on Monday, with another double-digit advance to a fresh three-and-a-half month high. In morning trade on the Comex division of the New York Mercantile Exchange, gold futures for April delivery – the most active contract – hit $1,329.90 an ounce, up $11.30 from Friday’s close.
Gold is now at its highest level since end October last year and up just short of 10% so far in 2014. There appears to be a definite shift in sentiment this year after 2013’s dismal 28% retreat in the price of gold………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Gold should be seen as one of the numerous investment options for accumulating wealth. The price of gold, which is primarily a commodity, tends to rise over time. Since investors do not adjust the price for inflation, they see the increase as positive. Kumar should understand that the longterm return from gold could be the same as the rate of inflation.
However, the prices of assets are not always driven by long-term trends. There are short-term events that can move the price significantly above or below the long-term average. Gold is valued for its ability to act as a substitute for any other asset, including currency. Therefore, the demand for gold rises when all other assets, such as equity, debt and currency, are falling………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Although a lot of focus was on gold last week as the price made major technical advances, silver was actually the better performer. Last week, Comex April gold futures advanced 4.2%; however, March silver futures rallied 7.27% with most of the gains coming on Friday as the price opened at $20.480 per ounce and closed the day at $21.421, a daily gain of 4.6%.
U.S. markets are closed Monday in honor of President’s day. However, in electronic trading, silver continued to outperform the yellow metal. As of 11:28 a.m. EST, March silver futures were trading at $21.905 an ounce, up 2.26% on the day, while April gold futures were trading at $1,328.80 an ounce up 0.77%………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Silver or the silver price is generally much more difficult to analyze than gold. Part of the reason is that so much less is known about the specifics of the silver market. Silver analysis is often done “through” the analysis of gold. This is not completely wrong, since silver and gold mostly moves in a similar manner – they have the same monetary properties after all.
However, it must be understood that despite their similar properties, they have different monetary histories (the last 400 years at least). These different histories have had the effect of causing silver to be scarce in a monetary form (silver suitable for pure investment demand like bullion), for example………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

A prolonged strike at South Africa’s PGM mines is finally beginning to impact prices of the metals. Workers at the world’s three largest platinum producers, Anglo American Platinum, Imapala Platinumm and Lonmin, have been on strike for more than three weeks.
Together the South African companies’ mines produce 3.5 million ounces in 2012; almost 60% of the world’s platinum. South Africa together with Russia control more than three-quarters of world supply………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

For the most part the commodities space found a good bid on Friday, but analyst commentary was a tad wary. Buying pressure might have been expected, given the better-than-expected gross domestic product (GDP) figures seen out in the likes of France, Germany and the Nertherlands, alongside a weak US dollar.
However, over the last few days different research outfits have been raising a red flag following the release of the latest set of very strong import data out of China. In particular, they highlighted the rise to all-time highs in imports of iron-ore (18% year-on-year), refined copper (53%), crude oil (12%) and even soybeans………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

President Obama’s fresh environmental plan has proved to be beneficial for renewable energy stocks. Alternative energy is the most happening thing in the energy sector now in the wake of widespread concerns over carbon emission, climate change and other pressing environmental issues.
A major growth area in the renewable space is solar energy. Following a listless 2011, the solar industry rallied in 2013. The U.S. Energy Information Administration (EIA) estimates that U.S solar demand increased more than 32% in 2013………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

LME announces a new policy to allow clients of LME members to connect directly to the Exchange’s electronic trading platform, LMEselect, for market data. The change will be effective from 24 March 2014.
In response to user demand, the LME will enable market participants to connect to LMEselect directly to receive a data-only feed. Until now, clients have only been able to access data through members or independent software vendors (ISVs). The new policy is of particular interest to members’ clients pursuing an algorithmic trading strategy, as they can now trade with the benefit of lower-latency access………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Zambia’s Lusaka Stock Exchange said it will consider buying a stake in Zamace Ltd., the sole agricultural commodities bourse in Africa’s largest copper producer, as the markets talk about areas of cooperation.
“These are the details that will come from the various discussions,” Brian Tembo, chief executive officer at the Lusaka Stock Exchange, said today in an interview in the capital. “We are not restricting ourselves to anything.”……………………………………….Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

The flexibility to fix transaction charges has sparked a fight among the commodities futures exchanges to grab market share, a majority held by the Multi Commodity Exchange (MCX).
The exchanges have started working on reducing the charges on non-agricultural commodities contracts like metals and energy’s that are cash settled and non-deliverable. Most important, these are 86 per cent of the accumulative turnover of all exchanges. The MCX accounts for 90 per cent of the turnover in this segment………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Many bitcoin users are probably too young to remember the Notorious B.I.G.’s 1997 rap hit “Mo Money Mo Problems.” A YouTube trip down memory lane won’t be a waste of time: Mo virtual money, mo problems.
After weeks marked by technological breakdowns, regulatory issues and general questions over its viability, bitcoin is in the midst of the worst crisis since it was proposed in a white paper in 2008………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

The rejection by all the Westminster parties collectively of the SNP’s Plan A for a post-independence UK currency union has elicited a string of possible Plan B solutions, several of them already considered and rejected as inferior to Plan A by the SNP’s expert group of ‘wise men’.
But the current debate is ill-founded, since the UK can have no more control over who uses the £ symbol as a unit of account, than they can have control over the use of metres and kilogrammes. As for currency, which is not necessarily the same thing as a unit of account, any number of countries ‘peg’ their currencies to a stronger currency as a unit of account………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

China’s Certified Emission Reduction (CCER) programme will generate credits that can be used to offset carbon emissions in the domestic pilot compliance markets. The National Development and Reform Commission (NDRC) will guide the development of this market by controlling approval of certain projects, leading to a much lower offsets supply than potentially available, according to Thomson Reuters Point.
Given the limited time to the first compliance deadlines in mid-2014, the short-term supply will be tight. Thomson Reuters Point Carbon’s analysis forecasts that only currently-listed projects will be issued credits in time for the first surrender deadline for a total of 5 Mt CCERs………………………………………..Full Article: Source

Posted on 18 February 2014 by VRS |  Email |Print

Iran may introduce emissions trading to curb consumption of fossil fuels and cut its carbon emissions, a government official in charge of energy efficiency said at the weekend.
The country is in the world’s top 15 biggest emitters of greenhouse gases because of its huge oil, gas and petrochemical industries, while cars and trucks also help swell its carbon footprint………………………………………..Full Article: Source

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