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Commodities Briefing 21.Mar 2014

Posted on 21 March 2014 by VRS |  Email |Print

Scientists have uncovered evidence of the Big Bang and “cosmic inflation” in recent experiments at the South Pole. But the average American doesn’t have to be an astrophysicist to find proof of cosmic inflation. All they have to do is look at their grocery budget.
Food prices are soaring, as ugly weather in California and South America wreaks havoc on harvests. If you’ve been watching the fast-moving commodity markets lately and you’re looking to get a piece of the action in agriculture — or if you’re just an investor looking to hedge your portfolio against the volatility — thankfully there are many ways to play these recent trends. And most of them fit comfortably in the typical brokerage account or IRA………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Over the last ten years, consensus has been the best at forecasting prices for aluminium, zinc and nickel and the worst at forecasting copper, iron ore, gold and silver. The average error over a 1 year time frame for aluminium has been 4%, and over a 2 year period 5%. For Zinc this is 2% and 4%, Nickel 5% and 3%.
By contrast, the error on the copper forecast has averaged -7% and -19% and iron ore -8% and -21% for 1 and 2 year horizons, respectively. This suggests that a counter consensus view on aluminium, zinc and nickel prices is unlikely to be the correct course of action, while it for copper and iron ore one has to be contrarian to stand any chance of being right………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

After a decade of volatile prices, the past three years saw an unusual period of stability in the oil market, with a barrel of crude oil averaging $110 each year. However, forecasts for 2014 predict a decline to an average of $105, on the basis of expanding supply and a weaker-than-expected demand.
A combination of geopolitical events in Syria, Libya and Nigeria have prevented oversupply despite the expanding entry of US shale oil into the market. The price has remained high thus far, but how long can prices stay above $100?……………………………………….Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will cut crude exports to the lowest level in two months as refiners around the world conduct seasonal maintenance, according to tanker-tracker Oil Movements.
OPEC, responsible for 40 percent of global oil supplies, will reduce shipments by 620,000 barrels a day, or 2.5 percent, to 23.74 million a day in the four weeks to April 5, the researcher said in an e-mailed note………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Regional power shifts and how they affect the supplies of gas and oil central to 21st Century life. It keeps the lights on, our transport systems running and businesses on track - without it modern life would simply not function.
Energy is at the centre of our lives and - as recent events have shown a key influence in the cause and consequences of conflicts around the globe………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The International Energy Agency’s gas expert has warned United States natural gas prices could rise by more than 50 per cent and they would still stack up well against Australian exports. IEA senior gas analyst Anne-Sophie Corbeau spoke in Sydney yesterday where she acknowledged Australia is still on track to become the largest LNG supplier in the world by the end of the decade.
However, according to media reports, Ms Corbeau also said North America is best placed for new investment in the sector………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The White House’s first round of “sanctions” announced Monday against 11 individuals involved in Russia’s recent actions in Ukraine and Crimea evoked gales of laughter in Moscow, according to news reports. An embarrassed President Obama made a second try with additional penalties on Thursday.
Of course, President Obama’s defenders are quick to point out that our options in this case are limited. Certainly that is true of potential military steps. There is one alternative that could be a game changer, though: wielding the energy weapon against Russia, a country that has not hesitated to use that weapon to advance its own interests………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

NYC-based PIRA Energy Group believes that global LNG demand is set to tumble. In the U.S., Thursday’s EIA report highlighted the market’s continued above-normal reliance on inventories. In Europe, PIRA remains relatively unconcerned about a cut-off in gas flows through Ukraine. Specifically, PIRA’s analysis of natural gas market fundamentals has revealed the following:
Global demand is set to tumble starting next month and weak signals from key counter-seasonal markets like Brazil and India are emerging too. Spot price floors will be kept by a strong round of seasonal maintenance in Qatar in particular………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The gold price could reach US $1400 by the end of the month according to a Perth economist. Chief economist for ABC Bullion Jordan Eliseo said the unrest in the Ukraine was pushing the price of gold up.
“If we break US $1430 I think the gold price will continue to appreciate,” Mr Eliseo said. The gold price was US $1332.57 or $1332.57 on Thursday after reaching a six-month high earlier in the month………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

According to a new survey, Only 44% of Americans say they or their spouses have calculate how much money to t live comfortably in retirement, let alone how to invest it. Only 18% of workers are confident they’ll retire comfortably.
For those who do save, taking the extra time to plan out how to shine in their golden years, it is just as important to have a strong, diversified portfolio. To those responsible savers, Gold IRA’s are an obvious choice………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Give those guys a gold star. Gold-mining stocks, so bad for so long, are finally doing what they are supposed to. Namely, offer leveraged exposure to a gold-price rally. Gold is up 11% so far this year; mining stocks have jumped 21%.
That is in sharp contrast to recent years: In 2011, for example, gold hit an all-time high and gained 9%; mining stocks fell 16%. The miners’ rehabilitation, though, isn’t complete. Investors should look for deals—in more ways than one………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

This year is turning out to be a great one for platinum group of metals. New sanctions placed on Russia, the world’s largest producer of palladium, may see interruptions in the shipments of the metal, putting further pressure on an already tight supply.
Given the metal is a key component in the auto industry, analysts are concerned that Russia may react to sanctions by restricting supply of palladium putting pressure on the United States’ car industry………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Copper, dubbed by traders as the metal with the economics Ph.D., may need a new nickname. While the world economy is forecast to expand by the most in three years, the metal that former Federal Reserve Chairman Alan Greenspan said he once considered a useful indicator is plunging.
Prices in New York are off to the worst start to a year since the Comex futures debuted in 1988. In the past 16 quarters, copper moved in the same direction as global gross domestic product just six times. In December, its correlation to the Standard & Poor’s 500 Index was the lowest since 2008………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Investors have been returning to exchange-traded products, backed by physical commodities, as geopolitical and economic turbulence unsettles the market, the associate director, research, at ETF Securities has said.
Nitesh Shah said over the past few months, investors have been building ‘long positions’ in physical commodities, such as silver ETFs, long copper ETFs and aluminium as a hedge against equity market fluctuations………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

It turns out that not one but two palladium exchange-traded funds will be launched in South Africa next week.
The corporate and investment banking division of Absa Bank Ltd., member of Barclays , Thursday said it will list its palladium-backed ETF, NewPalladium, on the Johannesburg Stock Exchange on March 27………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Commodities have been the mainstay of China’s derivative markets so far but the launch of equity options on two of the country’s main exchanges could see this dominance challenged.
Although the first commodity-linked futures contract in China was traded in March 1991 on the Zhengzhou Commodity Exchange, the development of other asset classes including equity-linked futures and options products has lagged markedly with the first futures contract referencing the CSI 300 index, an index of 300 Shanghai and Shenzhen listed A-shares, launched as recently as 2010 on the China Financial Futures Exchange (CFFEX)………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Commodity derivatives traded via the Singapore Exchange (SGX) rose by 70 per cent last year, outpacing the global growth rate of 23 per cent, SGX said on Thursday.
It said over-the-counter (OTC) Iron Ore was its most popular commodity derivatives contract, with the number of lots traded rising by 166 per cent to 584,157 lots. The highest percentage growth was generated by OTC Rubber, which grew 278 per cent to 2,778 lots………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Vermillion, the commodity arm of U.S. private equity group Carlyle Group LP, started trading a new gold and base metals fund this month as it seeks to rebuild market presence after losing more than half of its capital, people familiar with the matter said on Thursday.
In a regulatory filing dated Feb. 14, Vermillion’s chief operating officer, Christopher Zuech, said the Aeris Metals Fund had raised $122.5 million from 23 investors in total. The filing did not state the launch date………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

A global commodities giant in less than a decade. That’s where Mercuria Energy Group is headed. Launched in 2004 by former Goldman Sachs traders Marco Dunand and Daniel Jaeggi, the Geneva, Switzerland-based company was the sixth biggest commodities firm last year, with revenues of $98 billion.
With today’s news that Mercuria will purchase JP Morgan Chase’s commodities business for $3.5 billion, it’s likely to overtake Koch Industries and move up a spot………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

JPMorgan commodity chief Blythe Masters laid out an ambitious plan four years ago to become the top Wall Street bank in energy and metals trading.
Last year Masters achieved that goal, a closely watched report said on Thursday, the day after the bank announced the sale of the giant physical commodities operation she had assembled………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

Corporations could be entering a new phase of currency volatility. Emerging-market currencies in countries such as Argentina, India and China could have a bigger impact on earnings in the coming years.
“In the very long term there’s a good reason to invest in emerging markets, however in the next few years I think we’ll see a lot of volatility,” said Bilal Hafeez, Deutsche Bank AG’s global head of foreign exchange strategy………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The big red currency has crossed a big red line. It might not be so scary on the other side. A year of steady appreciation in the yuan has gone poof in a few weeks, with the Chinese unit now crossing the 6.20-per-dollar threshold.
Market players have warned that breaching that level would trigger collateral calls on investment products that could unleash even more instability in the currency. Those products were sold when the yuan was stronger than 6.20—with herd-like consensus that it could only go in one direction………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

It takes a particular kind of environmental policy to irk industrialists and greens alike. In its short life the Carbon Price Floor (CPF), a tax on pollution that was frozen by the chancellor of the exchequer on March 19th, has done precisely that. Holding down the unloved levy—for four years from 2016—will cut energy costs for businesses and householders.
But it leaves Britain’s climate policy in a mess. Carbon taxes or trading schemes, which aim to encourage investment in low-carbon generation by steadily raising the cost of alternatives, are the cheapest way to clean up smoggy economies………………………………………..Full Article: Source

Posted on 21 March 2014 by VRS |  Email |Print

The government’s carbon tax repeal laws have been voted down by the Senate, leaving the fate of Australia’s carbon pricing scheme up to the new Senate that sits from July.
It appears very likely the carbon price will then be repealed – and the government says its repeal laws will make the end date of the tax retrospective to 1 July, 2014 – even if they have not passed the parliament by then………………………………………..Full Article: Source

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