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Commodities Briefing 16.Jun 2014

Posted on 16 June 2014 by VRS |  Email |Print

Hedge funds cut wagers on rising agricultural prices at the fastest pace since January before the U.S. government predicted rising supplies of everything from wheat to rice. Money managers are now holding the smallest wager on farm goods including cotton and soybeans in almost four months.
The Standard & Poor’s Agricultural Spot Index fell for a seventh week, the longest streak since 2001. Global wheat stockpiles will reach a three-year high before the 2015 harvest, and corn reserves are poised to be the biggest since 2000, U.S. Department of Agriculture data showed June 11………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Brent crude was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year. Now, with violence escalating in Iraq, how far the price will rise has become anyone’s guess.
The international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war. The Islamic State in Iraq and the Levant, known as ISIL, has halted repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

If Iraq’s oil supply goes offline, crude prices could hit $150-$200 a barrel, T. Boone Pickens, founder of BP Capital Management, said. “That’s where you have to kill demand with price. That’s the only way you can do it, because oil won’t be there,” Pickens said in an interview with “Street Signs.”
Crude hit a nine-month high Friday as fears intensified over the conflict in Iraq and its potential to disrupt country’s the oil supply. U.S. crude—West Texas Intermediate (WTI)—hit a session high of $107.68 a barrel early Friday. Brent rose to an intraday high of $114.69………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Is the market at the cusp of a rally in commodities? Crude oil prices have soared on news of turmoil in Iraq, one of the world’s top oil exporters. West Texas Intermediate Crude, the US benchmark, gained over 2 per cent and hit an eight-month high. This rattled equity markets and the Sensex tanked nearly 350 points on Friday.
The market reaction to higher crude oil prices is not surprising. India is one of the world’s top crude oil importers and higher crude oil prices would translate into higher consumer inflation, losses for government-owned oil refiners and increased fuel subsidy and higher fiscal deficit. This is a recipe for poor GDP growth and market volatility………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

The Islamist advance this week across northern Iraq has yet to have a major effect on the country’s oil exports, so why are world prices rising? Oil experts say the 4% price spike since June 6 — which has taken a barrel of crude to $107 for the first time since September 2013 — is being driven by fear that exports could be hit later this year, just as world demand peaks.
An al Qaeda splinter group occupied Iraq’s second biggest city — Mosul — earlier this week and has pushed on towards the capital, Baghdad. The group is trying to establish an Islamic state straddling the Iraq-Syria border………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

A couple days ago, I read a fascinating piece by an analyst who predicted that the price of oil would plummet. He covered every possible angle that supports this idea: increasing short positions, fiscal policy changes, increasing production in the U.S. and in other parts of the world, and slowing demand in Organization for Economic Cooperation and Development nations, to name just a few.
The article went into extreme detail on each of these points and explained why they were a signal that oil was headed nowhere but down………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

In one sense, energy doesn’t matter all that much to what’s coming. Once debt reaches a certain level, oil can be $10 a barrel or $200, and either way we’re in trouble.
But the cost of energy can still play a role in the timing and shape of the next financial crisis. The housing/derivatives bubble of 2006 -2008, for instance, might have gone on a while longer if oil hadn’t spiked to $140/bbl in 2007. And the subsequent recovery was probably expedited by oil plunging to $40 in 2008………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Saudi Arabia has suggested OPEC meet just once a year, rather than twice, a sharp reduction from the days when the group met for up to seven times a year in the early 2000s. The OPEC meetings since 2012 have produced no policy change and Wednesday’s gathering in Vienna was no exception, sticking with its production target of 30 million barrels per day (bpd).
The 12-member cartel used to give traders more to worry about, meeting several times a year, convening emergency meetings at short notice and sometimes making surprise decisions as it tried to micro-manage the oil market………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Gold prices are starting the week on a strong footing as renewed geopolitical risks create modest demand for safe-haven assets, said analysts. To start the week, electronic trading of Comex August gold futures opened the Sunday North American evening/Monday Asian session at $1,276.80 an ounce, up from Friday’s pit close of $1,274.10 an ounce.
Since the open, the rally in gold prices has been fairly consistent; as of 8:53 p.m. EDT, August gold was trading at $1,279.30 an ounce, up $5.20 or 0.41% on the day………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Rising tensions in Iraq and weaker-than-expected employment data in the U.S. last week saw gold gaining on the international market as well as the domestic market. Following the global cues, investors and stockists resorted to gold buying for its ‘safe haven’ status and standard gold in Mumbai moved up from Rs. 26,660 per 10 gram on Monday last to close Saturday at Rs. 27,325 a 2.5 per cent gain.
Bullion traders and market watchers who were very confident of gold’s declining trend, are now more sanguine. The reaction in prices could be more gradual, they felt………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

The physical gold premiums in India have plunged to nine-month lows. According to market players, the premiums which quoted at $15 to $18 per oz more than halved during the week to under $10 per oz. The premium on gold quoted at $8 per oz at Zaveri Bazaar in Mumbai — the major hub of gold trade in the country.
The retail demand for gold has also weakened. The weak retail demand has choked rise in domestic gold prices in tandem with rallying international prices on Thursday. While the international prices surged over ten dollars, the prices in India were up only by Rs.50 per 10 grams and just managed to hold the levels of Rs. 27,000 per 10 grams………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

Today I want to take a look at a couple of charts for Silver and discuss whether we may be seeing some signs of the commodity creating a bottom. First up we have the weekly chart of the price action for the iShares Silver ETF (iShares Silver Trust (ARCA:SLV)). In 2013, Silver got destroyed, with the SLV knocked down over 30% for the year.
While Silver didn’t finish out the year on a strong note, it did put in a low for 2013 on the weekly chart in July. At the same time we saw the Relative Strength Index (RSI) finish four months in ‘oversold’ territory………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

The iron ore price is flirting with the crucial $US90 a tonne threshold after inching even lower over the weekend as weakened steel demand in China continued to weigh on the commodity. Benchmark iron ore for immediate delivery to the port of Tianjin in China is trading at $US90.90 a tonne, a decline from $US91.50 in the previous session.
The commodity is closing the gap between its current price and its $US86.9 a tonne trough during September 2012, and currently sits at its lowest point since September 7, 2012, when it traded at $US89 a tonne………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

The cost of hedging against losses in the largest Chinese exchange-traded fund in the U.S. has fallen to a record low on optimism that government stimulus will help sustain growth in the world’s second-biggest economy.
The iShares China ETF rallied for five weeks, gaining 10 percent in the longest streak in a year, while options pricing on the fund is indicating investors are less concerned about future losses. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. rose 2 percent last week for the biggest advance since February………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

While investors have been ploughing money into exchange-traded products over the past few years, niche exchange-traded funds that specialise in currency strategies have proved an exception to the rule.
Net inflows into global ETPs over the past two calendar years amounted to $507.8 billion. However, currency ETPs suffered more than $3.1 billion in outflows over the same period, and a further $918 million had been withdrawn this year by May, according to consultancy ETFGI. Assets now stand at just $4.38 billion, against overall ETP assets of $2.34 trillion………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

SwiftBoatVet, a Reddit user, posted a couple of screens it got while filling out a survey for PayPal. It seems the survey itself was revolving around Bitcoin, asking for direct comparisons of the two payment systems.
While this fits in quite well with the comments made recently by eBay’s (owner of PayPal) CEO, John Donahoe, who expressed the opinion PayPal could integrate Bitcoin, the survey itself turned out to be somewhat unclear since it treated Bitcoin more as a PayPal clone than a currency or payment system………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

A private sector initiative to boost local uptake of digital currencies such as Bitcoins has resulted in the formation of the Association of Crypto-Currency Enterprises and Start-ups, SIngapore (ACCESS).
In a statement released on Monday (June 16), ACCESS said it is a fully registered society with the Registry of Societies under the Ministry of Home Affairs (MHA) representing various businesses within Singapore’s Bitcoin and other cryptocurrency ecosystem. These businesses include exchanges, merchant transaction services, vending machines, and miners, it stated………………………………………..Full Article: Source

Posted on 16 June 2014 by VRS |  Email |Print

The use of carbon markets to curb rising greenhouse gas emissions was dealt a blow on Sunday after two weeks of United Nations talks on designing and reforming the mechanisms ended in deadlock.
The negotiations, held as part of U.N. climate negotiations in Bonn, Germany, made scant progress as envoys representing almost 200 nations tied reforms to progress under the wider discussions and remained entrenched in diverse positions………………………………………..Full Article: Source

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