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Commodities Briefing 05.May 2014

Posted on 05 May 2014 by VRS |  Email |Print

Twelve months is a long time in investment. “2013 was a year when many investors may have questioned the role of certain asset classes, especially commodities,” says Nick Spencer, director of consulting at Russell Investments, after a year in which the Dow Jones-UBS commodity index lost 9.5 per cent but the Russell 3000 US equity index jumped 33 per cent.
So far this year the Dow Jones index has rebounded 9 per cent, and Hermes Fund Managers has declared the outlook for commodities to be its most propitious for a decade………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

The recent bout of vertigo in US technology and momentum stocks has coincided with another, less-heralded, reversal. Commodities, the fallen angel of the investment world, are on pace to have their best year since 2007. The first quarter of 2014 was only the second in the past 10 in which commodity indices outperformed their equity counterparts. In the second quarter, so far, that has accelerated.
Since the discovery in 2008-09 that commodities neither go up in a straight line forever nor pay a dividend, they have suffered a period in the wilderness with respect to investor demand. But they may be starting to emerge………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Kuwait will support OPEC’s decision to achieve stability in the oil market, said Kuwaiti Minister of Oil and Minister of State for National Assembly Affairs Dr. Ali Al-Omair said here Sunday.
On the sideline of the two-day high-level meeting on climate change in Abu Dhabi, Al-Omair said that Kuwait will support OPEC’s efforts to create a comfortable atmosphere for both oil suppliers and consumers. He noted that his country would back OPEC’s decision to keep the current oil production………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Since the early 1970s, most major oil deals have been transacted in “petrodollars.” But that system has become increasingly challenged in recent years. The conflict in Ukraine right now has only served to exacerbate things.
As America leads the charge to impose Western sanctions on Russia, it’s a plan that’s not only backfiring, but leading to opportunities for those who understand the consequences. After Nixon infamously closed the gold window in 1971, something needed to be done to retain the U.S. dollar’s status as world reserve currency………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Oil prices rose 34 cents Friday after a strong jobs report, but still remain under $100 a barrel after US supplies of crude surged to a new record. In London, Brent crude oil prices closed at $108.59 a barrel.
Prices fell below $100 earlier in the week, mostly due to a surge in U.S. supplies of crude oil, which rose to a record 399.4 million barrels, according to the Energy Department………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Russia has threatened to cut natural gas supplies to Ukraine in June if it receives no prepayment in an escalating row between Moscow, Ukraine and the European Union over energy supplies.
“If we do not receive prepayment for June by May 31, then it is possible Gazprom will reduce gas supplies to Ukraine or provide it with the capacity it has paid for by May 31,” Russia’s Energy Minister Alexander Novak said during joint talks in Warsaw between Russia, Ukraine and the European Commission………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

While most shale drilling over the past few years has been concentrated in North America, where energy companies have used a combination of hydraulic fracturing and horizontal drilling to unlock a bounty of shale oil and gas, the practice is slowly but surely spreading to other parts of the world believed to contain sizable shale resources. Will 2014 be the year that global shale drilling takes off?
According to a new report by Wood Mackenzie, a leading energy research and consulting firm, 2014 is poised to be the most active year for international shale drilling, with oil companies planning to drill some 400 shale wells outside North America this year………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Britain will be told to get fracking faster for shale gas when the House of Lords economy committee publishes its report this week. Britain’s fracking industry is being held back by environmental regulations drawn up in Brussels, a senior committee of the House of Lords is expected to say this week.
In a major report, the Lords are expected to call for permits to be granted more quickly to drilling companies to allow them to test the potential of newly drilled shale gas wells………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

The renewable energy bandwagon looks increasingly likely to deliver the German economy all the way back to the dark ages. Amongst the more ludicrous acts of lazy journalism political pundits practice, is the conceit that Angela Merkel is somehow akin to Margaret Thatcher.
Aside from being women, it is challenging to compare the Iron Lady with the dismally spineless stasis monger of Berlin. Whereas Thatcher combined vision, strategy and a strong belief, Merkel bends with the wind - or even without it. Thus her energy policy has become such a fiasco as to risk undermining the entire German economy………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Global coal markets are depressed amid a supply glut, but reports of the commodity’s demise have been greatly exaggerated, a new study says.
Prices for thermal coal, a commodity used by power plants to generate electricity, fell recently to less than $75 (U.S.) a tonne, compared with $190 in mid-2008. And prices for metallurgical (or coking) coal, a key ingredient used in the production of steel, have tumbled to $120 a tonne, from $300 in late 2011………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Speculators are the least bullish on gold in 2 1/2 months on mounting confidence that U.S. economic growth is accelerating out of its winter retreat.
Money managers cut their net-long position in bullion to the smallest since mid-February during the week ended April 29. Wagers tumbled 25 percent last month, the most since November, and investors cut their holdings in exchange-traded products backed by the metal to the lowest since 2009………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

If you watched much cable television in 2011 and 2012 you couldn’t help but be bombarded by all those commercials urging you to buy gold and silver. The pitch was bolstered by scary economic headlines. The dollar was falling. Congress was one big partisan gridlock and the not-so-subtle message of these ads was you’d better buy now before the whole house of cards collapses.
It would have been easy to be tempted. The price of both precious metals was rapidly rising. At the beginning of 2011 the price of gold stood at $1,405 an ounce. The following September it peaked at over $1,900………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Thomson Reuters today released its latest GFMS Platinum & Palladium Survey. This year’s Survey notes that the platinum market last year was in a surplus (prior to inventory movements) of 0.49 million ounces, but that the market is expected to revert to a deficit in 2014, driven by the disruption in the South African platinum mining sector, which typically accounts for more than 70% of world mined platinum supply.
It should be noted though that not all of South African output has been shut down and much of the production lost has been replaced with stockpiled material………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Nickel soared 15.2 percent in April, making it the month’s best performer in the S&P GSCI, the widely followed commodity index. In fact, with a 32 percent gain this year, nickel is outperforming every other one of the S&P GSCI’s 24 components with the exception of coffee (which has perked up more than 80 percent this year).
Why is nickel, an industrial metal used in the production of stainless steel, shining so bright? The rise can largely be pinned to Indonesia, which has issued a ban on nickel exports in attempt to foster Indonesian industry………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Legal firm, Herbert Smith Freehills, which has a strong mining team based primarily in London and Paris, hosted a well-attended copper bulls and bears panel discussion, organised by the London Chapter of Women in Mining and the Assocation of Mining Analysts.
For the bears were Paul Dewison of SNL and Robin Bhar of SocGen and for the bulls Olivia Ker of Blackrock and Bruce Alway of Thomson Reuters. The panel was ably moderated by AMA Chair Chris Welch who himself has a strong base metals-focused analytical background and tends to be bullish on copper so the rumour goes - but if so he kept his own views neutral throughout………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

As competition heats up in the exchange traded fund space, United States Commodity Funds is also jumping into the so-called fee war fray, lowering costs on four of its products.
According to a press release, the United States Commodity Index Fund (NYSEArca: USCI) will have a 0.80% total expense ratio, lowered from 0.95%. Additionally, the United States Copper Index ETF (NYSEArca: CPER), United States Agriculture Index Fund (NYSEArca: USAG) and United States Metals Index Fund (NYSEArca: USMI) now have a 0.65% expense ratio, also down from 0.95%……………………………………….Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

You already have a relationship with a financial adviser or brokerage firm. Do you also need a service to manage a portfolio of exchange-traded funds? These days, many advisers and financial firms are suggesting exactly that.
A class of uber-advisers dubbed “ETF strategists” has arrived on the investing scene, seeking to help individuals make smart choices among the nearly 1,600 easy-to-use and generally low-cost ETFs listed in the U.S. Providers include units of big brokerage firms and specialized wealth-management firms that direct billions of dollars………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

China’s currency was once so immovable nobody saw much sense in owning it. But the more Beijing loosens its grip, the more investors want to get their hands on it. The rags-to riches currency now comes to Frankfurt.
Frankfurt is joining London, Singapore and Hong Kong in the fast-moving market for bonds denominated in the Chinese currency, the renminbi. Germany’s KfW development bank announced it was issuing a two-year bond with the volume of 1 billion renminbi at the Frankfurt Stock Exchange………………………………………..Full Article: Source

Posted on 05 May 2014 by VRS |  Email |Print

Note to rest of the world: Stop bugging China on undervaluation of its currency. The World Bank’s re-estimation of global pricing is leading to a second day of questioning of economic verities. Yesterday, a number of publications used the new numbers to pronounce that the U.S. would next year lose its century-long ranking as the world’s number one economy.
Today, two economists at the Peterson Institute for International Economics, perhaps the world’s top econ think tank, used the numbers to conclude that the Chinese yuan was no longer undervalued, as it has been for decades………………………………………..Full Article: Source

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