Wed, Oct 1, 2014
A A A
Welcome kbr175@gmail.com
RSS
Commodities Briefing 11.Apr 2014

Tight money policy: Outlook turns bearish for commodities
Commodity funds bounce in Q1 after 2013 losses
China March commodity imports resilient despite slowing economy
Commodity market increased slightly in March due to encouraging supply fundamentals
OPEC says its oil output tumbled in March
OPEC cautious on economy, sees lower demand for its oil
OPEC sees lower demand as U.S. crude output rises
Looking back: Oil market's future is different from its past
North American oil glut to keep prices low, IMF says
US LNG will not cause European gas price drop: IEA economist
Natural gas loses decades-old tie to oil in landmark deal
IEE can determine regional oil price
A forecast for gold in 2014
Investing in the oldest commodity
Why Asian shoppers should blast gold prices sky high
India may hold key to higher gold prices – Mitsubishi Corp
Why I reckon the gold Price will hit $1,425…
Silver outshines gold at start of year
South Africa February platinum output plunges most in two years
Non-ferrous metal trade could suffer from US, EU sanctions on Russia
Nickel market will be in deficit in H2 2014 – Macquarie
Commodities ETPs ride first quarter turmoil to post 7pct gains
Commodities to continue rise: ETF Securities
How ETNs differ from ETFs
IMF advises Ghana to diversify export commodities
Russia, Kazakhstan and Belarus to have new joint currency by 2025
Sebi plans to increase trading hours for currency futures
U.S. senators back buttressing Ukraine's currency
Carbon grab—the next natural resource dilemma?
Why hasn't the US tried cap and trade for emissions?

Posted on 11 April 2014 by VRS |  Email |Print

From the late 1990s until the financial crisis in 2008, most commodities experienced double-digit annual real (inflation- adjusted) price growth, a period known as the commodity “supercycle.” The cycle extended despite the fallout in the economy with the rapid increase in the liquidity and monetary easing called QE in the developed world led by the US and Japan. Now as the tide of liquidity turns, commodities need to return to demand-supply dynamics and prices should readjust to that.
It is more or less an established fact that the era of monetary easing is coming to an end and the US Fed is gradually heading towards winding up its bond purchases. And if the economy sustains, the Fed might even reverse some of its purchases………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Commodity funds bounced in the first quarter from a 2013 loss, with the top performers in the Lipper Global Commodity group racking up double-digit returns after rallies in agriculture, natural gas and nickel.
Supply disruptions provided opportunities across the asset class, but fund managers said only a few of these bullish fundamentals would persist into the second quarter and that some commodities are now over-valued………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

China’s imports of iron ore and copper soared in March from the previous month in anticipation of higher seasonal demand in the world’s top metals consumer, though crude oil shipments dropped after three months of high inbound volumes.
The double-digit monthly gains in iron ore and copper shipments came even as China posted weak trade data, raising doubts whether the high commodity import levels are sustainable and reinforcing forecasts that the world’s second-largest economy has slowed notably at the start of 2014………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Commodities increased slightly in March as positive fundamentals and heightened macroeconomic risk supported returns. Nelson Louie, Global Head of Commodities in Credit Suisse’s Asset Management business, said, “Commodities were driven largely by fundamental factors in March, and returns were generally uncorrelated with other asset classes. The key themes continued over from January and February, and were largely related to one-off event-driven risks which negatively impacted supplies.
While weather risks seem to be subsiding in North America with the end of the winter season, the risk of further extreme climate events in South America and other parts of the world are still possible. In addition, heightened macroeconomic risk in Ukraine, and in other developing countries, most notably China, may continue to impact economically sensitive commodities.” (Press Release)

Posted on 11 April 2014 by VRS |  Email |Print

OPEC’s oil output tumbled to its lowest level this year in March, the cartel of some of the world’s biggest oil producers said Thursday. Production by the Organization of the Petroleum Exporting Countries—which supplies more than a third of the oil consumed globally each day—fell by over half a million barrels a day last month to 29.6 million barrels a day, the group said in its monthly oil market report.
A steep drop in Iraq’s oil output of nearly 300,000 barrels a day led the decline, though there was also a substantial downturn in Angola, Libya and Saudi Arabia last month………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

OPEC lowered the expected demand for its crude oil in 2014 and ended a run of upward revisions to global consumption growth, highlighting concerns over the economy and pressure on its market share from rival producers.
In a monthly report on Thursday, the Organization of the Petroleum Exporting Countries forecast demand for its crude oil in 2014 would average 29.65 million barrels per day (bpd), down 50,000 bpd from the previous estimate………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

OPEC trimmed estimates for the amount of crude it will need to pump this year amid rising U.S. supplies, and predicted that a “supply buffer” will accumulate before demand peaks in the summer.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s oil supply, will need to provide an average of 29.6 million barrels a day of crude this year, according to its monthly market report………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

By 1994, the oil industry had changed irrevocably due to the increased use of derivatives. Oil was once an internationally regulated utility run by the major oil companies and their home governments. The global industry consisted of a core group of vertically integrated oil majors, a large number of ‘national champion’ state-owned oil companies and some independents.
There were practically no trading companies, and their role was marginal. As for oil careers, they were much more like civil service jobs than they are today – any senior executive at a major oil company could count on getting highly paid in a much more secure environment than today’s………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

The International Monetary Fund said global crude oil prices have been relatively lower because of the growth in oil supply from North America. With U.S. oil production on pace to eclipse 9 million barrels per day near term, the trend should continue through next year.
Nearly all of the growth in global oil production is coming from the United States and Canada. Combined, North American production growth is around 1.2 million barrels per day from U.S. shale oil and Canadian oil sands. IMF said this growth was spilling over to the global marketplace. “Crude oil prices have edged lower, mainly as a result of the continued supply surge in North America,” it said………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Despite the expected growth of US LNG exports, Europe has “no hope” of seeing gas prices near US levels due to transportation costs, Fatih Birol, the International Energy Agency’s chief economist said Thursday.
LNG transportation costs, which include liquefaction, shipping and gasification costs, will add roughly $6/MMBtu and barely close the roughly $7/MMBtu differential between US and European gas prices, Birol said during a Center for Strategic and International Studies event………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

A contract for France’s largest natural gas company to buy the commodity from Azerbaijan shows the decades-old structure of Europe’s energy market is starting to crumble.
For the first time, GDF Suez SA (GSZ) signed a 25-year contract to buy gas from BP Plc and partners in the former Soviet republic at prices tied to those in Western Europe’s domestic gas markets, a person with knowledge of the matter said, asking not to be named because the terms are confidential………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Iran Energy Exchange (IEE) has the potential of playing a key role in determining oil price in the region, Managing Director of Iran Energy Exchange Ali Hosseini said on Wednesday.Talking to IRNA, Hosseini noted that since Iran is an oil-rich country, IEE has the potential of increasing supplies from the current 3,000 barrels per day to 10,000 bpd.
“Iran aims to prepare the ground for the presence of foreign buyers of crude oil in the energy exchange and diversify products supplied to buyers, including gas condensate,” he said.The first crude oil transaction at Iran Energy Exchange took place on April 6………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Gold has been a tempting investment option since 2005, when it gave the highest return of 31%. Over the next three years, gold held its ground and gave a smart return of 9%, 29%, and 43% percent, respectively.
In fact, up until 2011, gold had given a very good return to investors. Dating all the way back to 1973, gold has fetched an average return of 11%. It was only in 2013 the yellow metal took a drastic hit. With the stock market surging, the safe haven metal inevitably took a value hit. So where is gold going next?……………………………………….Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Forget Precious Metals… It was a commodity long before man started storing wealth in hard assets like gold and silver. And unlike gold and silver, this commodity has a very practical, non-ornamental use that a man with little training and no education can exploit.
Over the course of human history, it’s been the core cause of just about every major war, and to this day, it continues to appreciate. It’s the most basic, most pure form of wealth there is — a source of power and influence for anybody who owns it. It’s also the most recession-proof asset known to man………………………………………….Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

A backcloth of rampant investor confidence in the global economic recovery, combined with expectations of Federal Reserve monetary tapering, prompted a monumental shift in global gold demand last year.
The safe-haven metal shed more than 27% in 2013 — the first annual drop for 12 years — as investors flocked to riskier assets such as stocks and out of gold exchange traded funds (ETFs)………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Japanese trading house Mitsubishi Corporation said in a report published today that they retain a neutral to bearish stance on gold’s performance in the second quarter this year, despite the precious metal’s phenomenon gains in quarter one.
“In the light of gold’s performance in Q1, we raise our 2014 gold price forecast upwards by $20 to $1,265 but we remain essentially neutral to bearish on gold’s prospects for the remainder of the year. We anticipate gold will trade on average at $1,300 in Q2,” wrote analyst Jonathon Butler………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

As far as gold goes, I would describe myself as cautiously optimistic. Let’s not beat about the bush. I now have a target of US$1,425 an ounce and I’m hoping to see it by May. My stop is just below $1,275. If I’m wrong, I stand to lose about 30 bucks.
Several factors have led me to this target. First, gold seems to be having one of those years where it follows the seasonal patterns. That is, a strong January with a small sell-off towards the end of the month. Then a strong February with a peak towards the end of the month, followed by a nasty March………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

The popularity of silver is on the rise with investments in the metal outpacing it’s more illustrious peer gold during the first three months of 2014.
Investments in silver exchange-traded products sharply rose with net purchases worth $354 million in the first three months of the year and the metal “one of the few commodity ETPs” to see inflows every month of the first quarter, London-based ETF Securities said in a statement………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

South Africa’s platinum group metals output dropped the most in two years in February after a strike at the world’s three biggest producers crippled output.
Production of PGM metals fell 36 percent in the month, Juan-Pierre Terblanche, a spokesman for Pretoria-based Statistics South Africa, said by phone today. That was the biggest decrease since February 2012, when workers walked out at Impala Platinum Holdings Ltd. for six weeks. The decline caused total mining output to drop 4.8 percent from a year ago………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

The effects of any US and European Union (EU) sanctions on the non-ferrous metals trade with Russia could be significant, based on the volumes of metals traded.
The EU and the US agreed to work on the imposition of sanctions against Russia on Wednesday March 26. A four-party meeting involving the EU, US, Ukraine and Russia is to be staged next week to discuss the crisis………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

The nickel market will be in deficit in the second half of 2014 with no end to the deficit in sight, analysts at Macquarie said, revising their initial prediction that the market would remain in a surplus this year.
The nickel market will then see “enormous deficits” in 2015-18 on the Indonesian ore export ban, the analysts said in a note. Indonesia enforced a ban on unprocessed raw materials exports on January 12, causing higher prices for nickel ore, rising costs for nickel pig iron (NPI) and higher prices and premiums for refined nickel………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

The DJ-UBS Commodity Index has risen 7 per cent in the first three months of 2014. During the volatile start to the year, commodity ETPs reversed a year of consecutive quarterly outflows, ETF Securities says. Globally, commodity ETPs took in $300m (£179m) of net inflows in the first quarter, taking the total invested in the space to $122.4bn.
Precious metals, particularly silver, saw the most money, receiving $354m net purchases, continuing strong inflows from 2013. Agricultural materials were the second most popular, attracting $217m, whilst industrial metals brought in $162m………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Investment in commodities picked up in the first quarter of 2014 after underperforming last year, according to exchange-traded product provider ETF Securities Ltd.
Commodity-based exchange traded products received $271 million of net new inflows in the first quarter of 2014, the first increase since the fourth quarter of 2012. “Commodities, and particularly industrial metals, usually perform better in the late stages of economic recovery, which is what is happening now”……………………………………….Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Exchange-traded funds (ETF) have been in existence for over two decades now and millions of investors now use these flexible tools as their primary investment vehicle of choice. ETFs are extolled for being diversified, transparent, liquid, low-cost, and tax-efficient.
Put simply, they allow you the ability to instantly access a basket of stocks, bonds, commodities, or currencies with the click of a button at any time during the trading day………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Division Chief of Research at the International Monetary Fund (IMF), Thomas Helbling, has asked managers of Ghana’s economy to diversify the country’s exports to minimize shocks that come with declining prices of gold and cocoa.
Ghana has lost about $1.5 billion over the last few years because of declining prices of gold and cocoa on the international market. According to the Bank of Ghana, earnings from gold exports dropped to $5 billion from 5.6 billion dollars for last year, while cocoa also declined to $1.6 billion from $2.2 billion in 2012………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

In May 2014, presidents of Russia, Kazakhstan and Belarus will sign an agreement on the establishment of the Eurasian Economic Union. Sections 9 and 11 the agreement, the draft of which is available on the official website of the Russian Ministry for Economic Development, are devoted to the joint monetary policy and financial markets.
During the first stage, it is planned to set up an advisory board of the heads of central banks of participating states. The banks would be responsible for the rate of national currencies, regulation of banking and insurance activities and the harmonization of the securities market………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Longer trading hours may become the norm for currency traders soon. Capital markets regulator Sebi is planning to increase trading hours for currency futures so that market participants in India would be able to adjust and alter their positions in line with the movements in foreign currencies in global markets.
If the proposal is approved by the regulator, the currency futures market will be open from 9.00 am to 7.30 pm, Sebi chief UK Sinha said “The timings of the currency markets can now be enhanced from 5 pm to 7:30 pm. So, we are moving in a direction where the Indian currency derivatives market can help the corporates, for example, hedge on a continuous basis,” Sinha said……………………………………….Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

Two Republican senators want Treasury Secretary Jack Lew to consider bolstering Ukraine’s currency to limit the country’s sensitivity to external factors, including military and financial moves by Russia.
In a letter to Mr. Lew, Sen. Marco Rubio of Florida and Sen. Ted Cruz of Texas say they oppose any moves for Ukraine to further devalue its national currency, the hryvnia. The senators’ letter to Mr. Lew is another sign of the strong backing the Ukrainian government has won in some quarters on Capitol Hill, and particularly among Republicans, amid its continuing struggles with Russia………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

A Washington-based human rights organization warns of an unprecedented “carbon grab” by governments and investors that will infringe upon the rights of indigenous peoples in low- and middle-income countries in Latin America, Asia and Africa.
Research conducted by the Rights and Resources Initiative (RRI) reveals that there are no laws to guarantee that indigenous peoples and local communities will benefit from the global trade of carbon credits as nations cope with carbon emissions that impact global climate change. As deforestation threatens the livelihoods of remote forested regions, governments and investors may profit while rural communities suffer………………………………………..Full Article: Source

Posted on 11 April 2014 by VRS |  Email |Print

“Cap-and-trade,” whereby big polluters must pay to emit greenhouse gases against a capped total amount that is reduced over time — has been in effect across the European Union (EU) since 2005. This so-called Emissions Trading System (ETS) requires 11,000 of the largest electric and industrial facilities in 28 European countries to participate.
Some 45 percent of Europe’s total greenhouse gas emissions are regulated under the system. Proponents say the ETS has succeeded in keeping greenhouse gas emissions in check and making Europe a global leader on climate. The EU reports that, by 2020, emissions from sectors covered by ETS will be 21 percent lower than they were in 2005 and 43 percent lower by 2030………………………………………..Full Article: Source

See more articles in the archive

banner
October 2014
S M T W T F S
« Sep    
 1234
567891011
12131415161718
19202122232425
262728293031