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Commodities Briefing 23.Apr 2014

Posted on 23 April 2014 by VRS |  Email |Print

Barclays PLC confirmed plans Tuesday to exit most of its commodities businesses and focus on electronic trading in the markets it stays in. The bank, which is trying to reduce the size of its investment bank to improve returns and cope with new regulations, said it would continue to trade in precious metals, financial oil, U.S. financial gas and index products.
The Wall Street Journal and other publications had reported over the long Easter weekend that the bank would exit base metals and other physical commodities. “This decision is in line with Barclays’s stated objective to actively evaluate and manage our businesses, ensuring they meet strict economic and strategic criteria within the new regulatory environment,” the bank said……………………………………….Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Goldman Sachs Group Inc., whose three top executives began their careers at the firm in the commodity-trading unit, is poised to gain market share as pressure from regulators drives competitors to scale back.
Barclays Plc, the U.K.’s second-largest bank, said that it’s exiting commodities businesses other than trading precious metals and derivatives tied to oil, U.S. gas and commodity indexes. In January, the London-based bank cut jobs in the group that traded raw materials and in February shut power-trading desks in the U.S. and Europe………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

The boost the energy sector received up until early March is unlikely to be repeated as we move into the second quarter. Oil traders will be keeping an eye on several issues. China, the world’s biggest importer of oil, saw a dramatic reduction in February imports, after a record high in January. If this trend continues, demand growth could eventually have to be revised lower.
Meanwhile, the hope of reaching a comprehensive agreement between Iran and the West over the former’s nuclear intentions may have suffered a setback, given the breakdown in relations between Russia and the US over Ukraine. Iran has been exporting more than allowed under Western sanctions for the past four months, and this increases the risk of a crackdown if Washington feels economic pressure is being relaxed too quickly………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

The US energy industry is witnessing a transformation with advances in hydraulic fracturing technology causing huge production growth in natural gas by 35% or 17 bcf/d.
Bank of America-Merrill Lynch (BofAML)in a report said that since 2010 onwards, US domestic crude and liquids production has expanded by 2.5 mn barrels per day or 33%. As a result, America became the largest contributor to increase in oil and natural gas supplies in the world in 2010-13 period………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Iran is the only member of the Organization of Petroleum Exporting Countries (OPEC) that has expertise in deep-water oil and gas exploration, an Iranian oil official said. Director of the Khazar Exploration and Production Company Ali Osouli said exploring the reserves in the deep Caspian basin requires technological expertise only a few countries possess, Iran Focus reported.
“At present, Iran is at the top of Caspian Sea littoral states to that effect,” he said Sunday. Iran is among the world leaders in terms of oil reserves. More than half of its oil is found inland………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

The Netherlands, Europe’s second-largest gas exporter, may become an importer by 2025 as output falls from its Groningen province and progress in unconventional sources stalls, the International Energy Agency said.
“It is time to re-assess its energy security and to look at different cost-effective pathways to guide the transition,” Maria van der Hoeven, executive director of the Paris-based adviser to 28 nations, said in the agency’s review of Dutch energy policy………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

India more than doubled its crude oil imports from Iran last month from a year ago as sanctions have eased on Tehran, official data show. The figures released on Tuesday indicated that India imported 387,000 barrels per day (bpd) of oil from Iran in March.
The statistics also showed that crude shipments from Iran in the first quarter of 2014 rose about 43 percent from the same period last year. India imported around 358,000 bpd of Iranian crude in the first quarter of this year………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Benefiting from the booming Eagle Ford Shale and Permian Basin, Texas likely will best the oil output of every OPEC country but Saudi Arabia by year-end, says a top exploration official at ConocoPhillips, a key acreage holder in both of those oil-and-gas formations.
The Lone Star State is expected to end 2014 with 3.4 million barrels per day in oil output, which exceeds that of 11 of the dozen OPEC nations, ConocoPhillips Unconventional Reservoirs Technical Manager Greg Leveille said during a keynote speech at the 3rd Annual Eagle Ford Consortium Annual Conference in San Antonio………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Despite the weakening of the gold market last year, the demand for gold in Asia (mainly in China and India) strengthened during 2013. But does Asia still play an important role in determining the price of gold? Also, is the strong demand for the yellow metal in Asia enough to pull back up the price of gold?
Gold is currently trading around $1,300. In comparison, back in early April 2013, gold was close to $1,600 — this represents a roughly 19% drop. The plunge in the price of gold was mostly attributed to the decline in demand for gold as an investment………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

China is becoming much more influential on the global gold market. Its consumers invested heavily in gold jewelry and bars last year to make the country the world’s largest gold market. In the past, investors would predict gold prices based on India’s performance, and now they have to factor in China.
A recent slump in gold price was linked to behavior in China. The country greatly slowed the growth of its money supply, and that slowdown reduced investment in gold. This caused prices to slump, brining about a downturn, much like what happened to copper………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

An excellent way to achieve portfolio diversification and stability is to invest in gold. That’s because gold has long been the safe haven investment from the travails of the dollar.
There are several ways to profit from the yellow metal, including investing in gold mutual funds, gold exchange-traded funds (ETFs), junior gold stocks, and gold options and futures………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

The world’s two largest gold miners, Barrick and Newmont, have been in talks to merge over the past week, highlighting the difficult environment for miners since shares started falling in 2011. A merger would create a $30bn super-company likely to clear antitrust hurdles because it would only account for 13% of global mine production, well below the 35% threshold Canadian antitrust regulators care about.
At the same time, Goldcorp, Yamana and Agnico-Eagles are all looking to takeover Osisko Mining Corp, a Canadian junior miner. With gold prices down, the margins for these miners continue to be depressed, leaving M&A as one of the few avenues to pursue growth………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Gold prices fell to a near-three-week low on Monday amid sharp exchange traded fund outflows, continuing to erode mild gains posted in the first quarter of 2014. For those with an eye on silver the erosion of gold’s recent gains should come as no surprise.
Comex silver has led gold prices since 2011 and it’s not about to give up that leadership role. The lag between silver and gold prices has been reduced but silver continues to lead price developments. Looking at silver gives traders a leading advantage when it comes to anticipating the behavior of gold………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Often, the word “contrarian” equates to investors attempting to catch a falling knife. You don’t need to look like a used butcher’s block for contrarian strategies to pay off in the long run, however.
Recently, the precious metals markets have been consolidating following a severe decline from all-time highs. If you believe that they will someday regain popularity following another economic decline, political debacle, above average inflation, or other crisis, however, then join the club………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Record spending by Chinese consumers on new refrigerators, cars and laptops is boosting zinc demand, creating the biggest production shortfall for the metal in eight years.
Demand for zinc used in everything from steel auto parts and brass plumbing fixtures to rubber and sunscreen will exceed output by 117,000 metric tons this year, almost double the 2013 deficit, the International Lead and Zinc Study Group estimates. Morgan Stanley predicts prices in London will rise more than any other industrial metal in 2015………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Global tin market is facing a shortfall since 2010. According to the Hindu Business line, the condition will prevail for the coming years. The regulations imposed by the Indonesian government on tin trade are the main reason behind the deficit of the metal. This is due to the minimum bid price set by a committee for Indonesian tin each week which is above LME price.
Experts say that the traders cannot cope up with that price as long as there is limited availability of tin in other exchanges. Global Tin demand is expected to remain strong in the forthcoming years. However, many experts analyze that the prices of the metal will lose its momentum………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 141 million tonnes (Mt) in March 2014, an increase of 2.7% compared to March 2013. In the first three months of 2014, Asia produced 274.0 Mt of crude steel, an increase of 2.6% over the first quarter of 2013.
The EU produced 43.8 Mt of crude steel in the first quarter of 2014, up by 6.7% compared to the same quarter of 2013. North America’s crude steel production in the first three months of 2014 was 29.9 Mt, an increase 0.8% compared to the first quarter of 2013. The C.I.S. produced 26.3 Mt of crude steel in the first three months of 2014, a decrease of -2.8% over the same months of 2013………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Active managers have found a way to make exchange-traded funds—in the form of so-called ETF strategist funds—their friends. ETF strategists are active managers who design their own asset allocation models but have to make their market bets with at least 50 percent of holdings in ETFs, according to Morningstar’s widely accepted definition.
They are the only investment products growing faster than ETFs themselves. As of year-end, about $100 billion had poured into this sector………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Hong Kong Exchanges and Clearing took its first step into the commodities business by unveiling plans to list coal and industrial metals futures on its trading platform. HKEx, traditionally a cash equities exchange, expects to offer renminbi-denominated futures for zinc, copper and nickel, and a US dollar contract for thermal coal by the end of this year.
The launch of metals trading marks the first move to establish a commodities platform in Hong Kong, part of a much longer term strategic plan kicked off by HKEx’s $2.2bn purchase of the London Metals Exchange in 2012………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Buy land, said Mark Twain, they ain’t making it any more. He also observed that one of the secrets of success in life is to eat what you like and let the food fight it out inside. Taken together, these two aphorisms go a long way to explaining the appeal of investment in agriculture.
The world may not be making any more land but it’s certainly making more people, and increasingly many millions of those extra mouths are consuming what they like - and that means protein-rich meat diets of the kind the advanced economies have been enjoying for years………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

An El Niño weather phenomenon, which can trigger extreme weather patterns around the world and disrupt commodities markets, could start as early as July, according to a leading forecaster.
The Australian Bureau of Meteorology on Tuesday said six of seven weather models suggested sea surface temperatures in the Pacific could exceed El Niño thresholds “as early as July”………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Bitcoin is currently a more reliable store of value for journalists than it is for investors. The concept of a ‘digital cryptocurrency’ and its association with various shady goings-on has turned the virtual currency into a symbol for the digital age.
Bitcoin is reportedly anonymous, untraceable, and anarchic; either an ignorable pastime for geeks or a credible threat to the world’s biggest financial institutions………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Volatility among major currencies fell to the lowest since 2007 as global central-bank balance sheets continue growing, driving more liquidity into financial markets, even as the economy worldwide recovers.
Australia’s dollar rose the most in almost two weeks against its U.S. counterpart before a report economists forecast will show inflation accelerated. The yuan touched a 14-month low as China’s largest manager of distressed debt said the country’s soured-loan ratio increased “significantly.” ……………………………………….Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

IFC, a member of the World Bank Group, has signed a memorandum of understanding with the Shenzhen Emissions Trading Exchange to develop products that will help increase the volume of trades, create more business opportunities, and contribute to mitigating climate change.
China, the world’s biggest emitter of greenhouse-gas emissions, is working to cut its carbon emissions by implementing emissions trading schemes. Last year, the country initiated seven emission trading pilots at provincial and municipal levels, and Shenzhen was the first city to begin an emissions trading scheme………………………………………..Full Article: Source

Posted on 23 April 2014 by VRS |  Email |Print

Revenues for China’s biggest sellers of U.N.-issued carbon credits shrunk last year to a tenth of 2012 values, choking off billions of dollars flowing to clean energy projects in the world’s top carbon-emitter.
China will now have less money to put into a stepped-up campaign to cut greenhouse gas emissions, clean its air and raise the share of fossil-free energy in its total mix to 15 percent by the end of the decade, from a current 8 percent………………………………………..Full Article: Source

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