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Commodities Briefing 10.Jun 2014

Posted on 10 June 2014 by VRS |  Email |Print

Is the metal stored in a Chinese warehouse really there? Has the peanut oil shipment that a bank loaned money against been swapped for worthless water? Basic questions like these have begun to play on the minds of traders and bankers doing business in China, the world’s largest importer of raw materials, after an investigation began at Qingdao Port, a huge trading hub in the northeast, into whether more than one license had been issued for the same material.
The duplication, which leaves buyers out of pocket when they claim what they thought was theirs, may be a result of deliberate fraud by a company using the same metal to raise multiple loans………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

OPEC is set to stick by its oil output ceiling when it meets this week, as supply tensions linked to global crises help to keep crude prices high, benefitting producers. The Organization for Petroleum Exporting Countries, whose dozen member nations together supply about one third of the world’s crude, is widely predicted by experts to keep its daily output ceiling at 30 million barrels of oil.
While OPEC is satisfied with current price levels at around $100 a barrel, the cartel is in fact pumping below its collective target owing to abundant supplies in top crude consumer the US………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

The OPEC oil producers’ cartel appeared set to maintain its output ceiling later this week, Iraq and Venezuela said here on Monday. The Organization for Petroleum Exporting Countries, whose dozen member nations together supply about one third of the world’s crude, have a daily collective output target of 30 million barrels of oil.
“I have a feeling we are expecting to have another rollover,” Venezuelan Energy Minister Rafael Ramirez told reporters in the Austrian capital, two days before Wednesday’s OPEC gathering………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Six months ago, one of OPEC’s concerns was whether a U.S. shale boom might upend crude markets by providing too much oil. Today, the group of some of the world’s largest producers has a more short-term worry: How to compensate for lost Libyan crude at a time of rising demand and tensions between Russia and the West.
“That’s the big question: Who will fill the gap left by Libya?” said one delegate within the group, which meets in Vienna later this week to discuss its output. Members of the Organization of the Petroleum Exporting Countries—which produces one out of every three barrels of oil consumed daily in the world—are facing calls by some to boost output to help plug the gap left by fellow member Libya………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

With the North American crude oil production boom likely to be a major topic of discussion for OPEC ministers when they meet this week in Vienna, the cartel is not expected to raise production, especially because prices remain generally stable.
If prices rise from the current $100 to $110 a barrel, falling demand would be a concern. On the other hand, falling prices would approach OPEC members’ marginal cost of production. The crude oil production oil cartel, which controls about 40 percent of global oil supplies, has imposed a 30 million barrel-per-day production ceiling for all 12 members’ output for the last two years………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Libya’s attendance at Wednesday’s OPEC meeting will be an oddity for historians of the oil exporters club - a member with virtually no oil for sale. As it struggles with its worst crisis since the 2011 war that toppled Muammar Gaddafi, early talk of a swift resumption of output have given way to pessimism, leaving OPEC with a longer lasting hole of over one million barrels per day in its supply.
Production is below 200,000 barrels per day, Oil Minister Omar Shakmak said on arrival in Vienna on Monday for the meeting, a fraction of the 1.6 million bpd Libya pumped before the 2011 conflict………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

OPEC ministers say they will almost certainly leave their oil-production ceiling unchanged when the group meets this week. What really matters for markets is whether Saudi Arabia will respond to global supply shortfalls by pumping a record amount of crude.
Just six months ago, energy analysts predicted output from the Organization of Petroleum Exporting Countries would climb too high and Saudi Arabia needed to cut to make room for other suppliers. They changed their minds after production from Libya, Iran and Iraq failed to rebound as anticipated, and industrialized nations’ stockpiles fell to the lowest for the time of year since 2008. Saudi Arabia may need to pump a record 11 million barrels a day by December to cover the other member nations, says Energy Aspects, a consultant………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Ministers from the Organization of the Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s oil, are expected to leave their oil-production level unchanged in their meeting on June 11 in Vienna. In a Bloomberg survey 22 of the 23 analysts polled made a similar prediction.
What might have to change, however, is Saudi Arabia’s production quota within the cartel, as it will have to increase output to record levels to counteract supply shortfalls. “I don’t see anything changing in terms of the 30 million barrels-per-day target,” an unnamed OPEC source told Reuters. “It should be a fairly relaxed meeting.”……………………………………….Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Though the U.S. shale oil boom of the past several years has led to a renewed surge of domestic oil production as well as an oil glut, crude oil prices have remained stubbornly high. There are a growing number of reasons, however, why crude oil prices are likely to finally experience a bust in the not-too-distant future.
I avoid making firm predictions about the oil market because there are so many conflicting variables that affect oil prices, from supply and demand, geopolitics (which is inherently unpredictable), and the global monetary environment, but it is important to be aware of several factors that have a high probability of pushing crude oil prices lower in the next couple of years………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Spot gold prices are expected to trade on the negative note on the back of strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace, says Sushil Finance.
A spot gold price decreased by 0.08 percent on Friday’s trading session on the back of positive job data from US indicating improvement in labor market. Further, strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace added downside pressure on the prices………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Deutsche Bank said on Monday it begun operating a precious metals vault in London, joining a series of other institutions that offer to store gold in the global centre of the over-the-counter bullion market.
The vault has a capacity of 1,500 tonnes, making it significantly bigger than a 200-tonne storage facility that the bank owns at the Singapore Freeport. Other vaults are in Hong Kong, Zurich and New York………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Bullion dealers said that demand for precious metals like investment-grade gold and silver is rising in Singapore — this is due to the recent weakness in prices as well as tax-exemption in Singapore. Precious metals investors overseas are also looking more to Singapore as a haven to store their hoard.
According to retailer BullionStar, demand has roughly doubled in the first half of this year compared to the same period in 2013. Singapore aims to have a “gold-standard” environment for buying, selling and storing investment-grade precious metals — typically gold or silver products of close to 100 per cent purity………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

The cozy little world of gold trading is getting less comfortable. A handful of bankers in London currently set the world standard for gold prices, a practice that started in 1919 and is widely used by governments, miners and brokers to buy and sell the precious metal and its financial derivatives. But regulatory probes have shone an unwanted spotlight on the benchmark known as the London gold fix, and prompted calls for change.
The five banks that set the standard - Barclays, Bank of Nova Scotia, Société Générale, Deutsche Bank and HSBC - have been hit by multiple lawsuits from investors alleging they colluded to rig the price for their own benefit. Deutsche Bank, which gave up its seat on the gold-ixing panel, said the lawsuits had no merit. Barclays, SocGen and HSBC had no comment, and Scotiabank could not be reached………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Hedge funds cut bullish copper bets by the most in a month on concern that a supply surplus will return as demand growth slackens in Europe and China.
Money managers trimmed their net-long position by 24% to a four-week low. A probe into inventories in China spurred speculation that imports by the biggest consuming nation will drop, while the European Central Bank took unprecedented steps to combat deflation. Barclays Plc anticipates that global supply will outpace demand from the fourth quarter………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

After trading lower for most of 2012 and flat all of 2013, prices of polished high quality diamonds are suddenly soaring higher. While places in South India have registered a hike of 40% to 50% in diamond prices, diamonds in Mumbai are more expensive by around $506 (Rs 30,000) for a one carat stone.
The price of big stone carats have also jumped by 20% in North India. Jewellers have attributed the sharp rise due to lower supplies and higher demand in the country, reflecting a positive outlook for the diamond sector………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

The world’s largest platinum producers said they will consider what steps they can take to end a 20-week pay strike after government-brokered talks with the union leading the walkout ended in failure.
Negotiations overseen by Minister of Mineral Resources Ngoako Ramatlhodi with the Association of Mineworkers and Construction Union “have been dissolved without an outcome,” Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) said……………………………………….Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

In April, London Silver Market Fixing Limited announced that it will stop administrating silver prices in August this year. Meanwhile, the prices will continue to be administrated by members of the London Silver Market Fixing Limited – Deutsche Bank, HSBC and Bank of Nova Scotia.
This news came at a time when a number of U.S.-based investors and traders have filed up to 20 different antitrust claims against Deutsche Bank, HSBC, Barclays, Societe Generale and Bank of Nova Scotia, for collaborating to manipulate gold prices. Subsequently, Deutsche Bank resigned from its seat on London gold fixing after failing to find buyers for the seat………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

ETFs and ETPs listed globally gathered US$22.4 billion in net new assets in May which, when combined with a small positive market performance in the month, pushed assets in the global ETF/ETP industry to a new record high of US$2.55 trillion, according to preliminary data from ETFGI’s May 2014 Global ETF and ETP industry insights report. At the end of May the Global ETF/ETP industry had 5,283 ETFs/ETPs, with 10,293 listings, from 219 providers listed on 59 exchanges.
The ETF/ETP industry in many countries and regions also hit record highs in assets at the end of May 2014, including: in the United States US$1.8 trillion; in Europe US$459 billion; in Japan US$86.7 billion; in Canada US$63.2 billion and in the Middle East and Africa US$41.7 billion………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Another price drop for most precious metals encouraged large speculators to continue reducing their net-long positions across the board in precious metals futures and options positions on the Comex division of the New York Mercantile Exchange and Nymex.
Fund managers cut bullish exposure to gold and the platinum group metals in disaggregated and legacy weekly commitments of traders report from the Commodity Futures Trading Commission, while turning net-short silver for both reports. In copper they cut bullish positions in the disaggregated report and added to bearish trades in the legacy report. The data is as of June 3………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

For the first time since 2010 asset growth in European listed ETFs/ETPs, at 9.9% YTD, is outpacing asset growth in US listed ETFs/ETPs, at 6.1% YTD. The majority of net new assets in Europe went into equity exposures in May.
The S&P 500 ended May at an all-time high (1924). The S&P 500 is up 5% year to date, while the DJIA is up only 2%. US stocks have advanced each month in 2014 except for January. During May developed markets gained 2% and emerging markets 4% with Asia showing strong performance up 4%, according to Deborah Fuhr, Managing Partner at ETFGI………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Exchange traded funds (ETFs) have invested $1.5 billion in India in the past three months leading up to May, which is the highest among its peers such as China, Russia, Brazil, South Korea and others, shows EPFR, a global fund tracker, and Kotak Institutional Equities data.
The BSE Sensex has gained 14.7 per cent in the past three months between March and May, which is also the highest among its peers as global investors have chosen to put their buck on a Narendra Modi-led BJP government with a pro-growth outlook. Brazil’s Ibovespa Index gained 8.8 per cent while Russia’s Micex Index and China’s Shanghai composite Index stayed flat in the same period………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

For some time now, there has been concern that central bankers have “run out of bullets”. Having lowered their policy rates to near zero, they have engaged in increasingly extravagant measures such as “quantitative easing” and “forward guidance”.
Given the fog cast over real economic activity by the financial crisis, it is difficult to offer a definitive assessment of just how well or badly those measures have worked. But it is clear that there must be a better way to do things. There is no longer any reason to let the zero bound on nominal interest rates continue to hamper monetary policy………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Keep calm and carry on is the broad message from the currency market thanks to the generous support of central banks. Borrowing a currency at low interest rates and buying a rival sporting much higher short term yields is a nice little earner for investors, so long as market volatility remains quiescent.
As the European Central Bank becomes more accommodative with negative deposit rates and further easing expected this summer, the backdrop remains enticing for carry trades. Particularly as the US Federal Reserve appears set to keep its benchmark rates at very low levels for some time, after a May jobs report merely met expectations and plenty of slack remains in the world’s largest economy………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

A number of US states are starting to consider carbon trading schemes to meet limits on greenhouse gas emissions put forward in President Barack Obama’s latest climate change initiative.
The signs of interest show that although Mr Obama’s proposals for more sweeping cuts in power plant carbon emissions have been criticised in parts of the US, particularly coal-producing regions, there are others that accept his strategy………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Tony Abbott has praised Canada’s approach to climate change, and emphasised the close ties shared between the two countries. The world’s two largest economies - China and the US - are increasingly adopting carbon trading to cut greenhouse gas emissions, contrary to suggestions by Prime Minister Tony Abbott that other countries are not introducing schemes.
Speaking in Canada, Mr Abbott said carbon taxes and emissions trading were the wrong way to address climate change. He said the debate was not about the existence of climate change, but the best approach to respond to it and he backed ”direct action measures” such as improving energy efficiency and planting more trees………………………………………..Full Article: Source

Posted on 10 June 2014 by VRS |  Email |Print

Companies are strongly protesting the government’s plan to introduce a greenhouse gas emissions trading system. Analysts say the government should take into account diverse factors instead of just pushing the plan forward.
The Ministry of Environment announced Wednesday that the country will start the emissions rights trading on the Korea Exchange from next year. The ministry will set quotas for energy-intensive businesses, and those successfully cutting emissions can sell the remaining rights to those failing to meet their obligations………………………………………..Full Article: Source

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