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Commodities Briefing - Archive | October, 2015

The global commodities slump is hitting Africa hard

Posted on 30 October 2015 by VRS  |  Email |Print

If you live by commodities, you will die by commodities. In Africa, this aphorism is becoming true in a devastating fashion. The continent’s economies rode the global demand for commodities in the early part of this century to create some of the fastest economic growth in the world.
In fact, in the first 10 years of this century, six of the 10 fastest growing economies came from Africa. But those good times have come to an end. Demand for commodities has slowed down considerably, representing a “formidable shock for many of the sub-Saharan African countries that are still substantial commodity exporters,” a recent report by the IMF says………………………………………..Full Article: Source

No need for commodities investors to worry too much over Fed rate increase, analysts say

Posted on 30 October 2015 by VRS  |  Email |Print

US interest rates have long been regarded as critical in determining the outlook for commodities, but some analysts say investors need not worry too much about the US Federal Reserve reversing its monetary stimulus efforts in the near term, because commodity prices could rally even as US interest rates return to more normal levels.
Julian Jessop, chief global economist for Capital Economics, said in a report on Wednesday that it was widely assumed an increase in US interest rates might lead to lower commodity prices, as higher rates could result in slower economic growth, reduced demand for commodities, and increase the opportunity cost for investors holding commodities………………………………………..Full Article: Source

Weary commodity investors see end of slump

Posted on 30 October 2015 by VRS  |  Email |Print

After commodity prices tipped over in 1997, it took 21 months to arrest the fall. In 2000-01 it was 13 months. After collapsing along with the global economy in 2008, commodities hit the floor in just eight months. This time, the Bloomberg Commodity Index has been in decline for four years and counting. From its most recent peak in May 2011, the benchmark is off by half and scraping the lowest levels of the 21st century.
Worn-out investors are asking: have commodity prices finally bottomed? “It’s top of mind for anyone looking at the market,” says Norbert Ruecker, head of commodities research at Julius Baer in Zurich………………………………………..Full Article: Source

Emerging markets and commodities: These are 2015’s seven worst-performing funds

Posted on 30 October 2015 by VRS  |  Email |Print

To say investors have been having a rocky 2015 is putting it mildly, with concerns over China’s worsening slowdown, a continuing commodities rout, and emerging markets getting pummeled. And all that before Black Monday came along and pulled the rug from under our feet as Chinese stocks fell to the floor on 24 August.
But some funds have been performing worse than others. FE Research has put together the seven active funds giving investors the worst headaches. It’s not hard to see the common ground here: Emerging markets and commodities funds are struggling the most, as Patrick Enright, analyst at FE Research said:……………………………………….Full Article: Source

10 high yield stocks safe from the commodities rout

Posted on 30 October 2015 by VRS  |  Email |Print

Miners and oil majors are offering high, but vulnerable yields. Here are some alternatives. Finding high-yielding stocks couldn’t be easier: simply buy a large-cap mining or oil stock. But as Glencore’s suspension of its dividend last month showed, these yields can be vulnerable, and more cuts are likely to come.
So are there any high-yielding stocks worth owning? Yes. Here, Citywire highlights 10 companies - from giants to minnows - offering at least 25% more than the FTSE All-Share’s current yield of 3.6%. All are held by Citywire-rated managers, and none are commodity stocks………………………………………..Full Article: Source

Oil Will Struggle to Break Past $60 a Barrel in 2016

Posted on 30 October 2015 by VRS  |  Email |Print

Some of the world’s largest energy companies and investment banks are becoming more pessimistic about the ability of crude oil pricing to reach even $60 a barrel next year, reporting steep losses as they take hits on projects that no longer make financial sense.
A barrel of oil fetched more than $100 in June 2014, but a combination of ample supply and weaker demand has driven the international benchmark price to about $50 in the third quarter, the lowest sustained levels since the financial crisis………………………………………..Full Article: Source

Oil futures edge up to settle above $46 a barrel

Posted on 30 October 2015 by VRS  |  Email |Print

Oil prices edged higher to settle above $46 a barrel on Thursday, extending the more-than-6% rally they saw a day earlier, as bets on a slowdown in production grow. Natural-gas prices, meanwhile, ended lower as supplies moved closer to a record level.
December West Texas Intermediate crude tacked on 12 cents by the close, or 0.3%, to settle at a more-than-one-week high of $46.06 a barrel on the New York Mercantile Exchange. Prices jumped 6.3% on Wednesday, as a rise in crude stockpiles wasn’t quite as large as some expected and supplies of gasoline fell………………………………………..Full Article: Source

OPEC will cut production eventually

Posted on 30 October 2015 by VRS  |  Email |Print

If you’re in the oil business and wondering when prices are going to go back up, you could do a lot worse than asking Ken Hersh. The founder of NGP Energy Capital Management, an Irving-based firm that manages billions of dollars in energy investments, Hersh has developed the reputation of something of a guru on the world’s oil and gas markets.
And Hersh thinks sooner or later the Organization of Petroleum Exporting Countries, which represents the likes of Saudi Arabia, Kuwait and Venezuela, is going to “blink” and cut their production – reducing the global crude supply and theoretically raising prices………………………………………..Full Article: Source

Gold price nerves exposed in post-Fed dive

Posted on 30 October 2015 by VRS  |  Email |Print

Any lingering sense that gold traders have fully ‘priced-in’ the impact of an interest rates rise and are no longer in the thrall of the central bank’s indecision was blown apart on Wednesday. At first blush, the decision that ended the Federal Reserve meeting was no surprise – and should even, if anything, have helped gold.
Rate setters voted decisively against increasing interest rates, as they had been expected to do - non-yielding assets tend to suffer when rates rise and boost income-based returns available elsewhere………………………………………..Full Article: Source

Barrick Stays Bullish as Gold Prices Head for Third Annual Drop

Posted on 30 October 2015 by VRS  |  Email |Print

Gold, headed for a third straight annual decline in the longest slump in 15 years, will rebound as early as 2016, according to the world’s biggest producer of the metal. Purchases from central banks and supply that’s insufficient to meet demand will help spur the turnaround, Kelvin Dushnisky, president of Toronto-based Barrick Gold Corp., said in an interview.
Barrick on Thursday reported third-quarter earnings that beat analysts’ estimates as lower costs and higher production helped offset weak metals prices. “Even beginning next year we could start to see an increase in the price,” Dushnisky said by phone. Gold is facing some “choppiness” in the near term, “but medium and longer term we’re very bullish,” he said………………………………………..Full Article: Source

$50 Silver? Here’s Why Silver Prices Could Be Set to Soar

Posted on 30 October 2015 by VRS  |  Email |Print

Silver prices may be down now, but think long-term. There are a few factors I am closely watching that suggest silver is going to surprise investors in a big way. This may be bold, but I am not ruling out a silver price of $50.00 an ounce in the next few years. Yes, that’s more than a 200% increase in silver prices. Industrial Growth to Boost Silver Prices?
You see, oftentimes it is forgotten that silver isn’t just used for investments and making jewelry. The grey metal has a massive industrial use as well. In fact, the industrial sector is the biggest consumer of silver. To give you some idea, in 2014, the total demand for physical silver was 1.1 billion ounces. Industrials used 594.9 million ounces of silver; simple math will tell you this represents a little more than 56% of entire demand………………………………………..Full Article: Source

Commodity ETFs: How To Maintain Exposure In Difficult Environment

Posted on 30 October 2015 by VRS  |  Email |Print

Ongoing global risks could continue to drag on commodity markets and related exchange traded funds, but it may leave opportunities to jump into some commodities, notably precious metals. On the recent webcast, The Global Economy: Divergence, Commodities and the Dollar, Helen Henton, director commodities at Roubini Global Economics, points out that global economies still face some significant headwinds, notably commodity exporters in the emerging markets, with Latin America expected to be the weakest region in 2016 and Brazil remaining in recession.
Consequently, Henton expects some painful supply adjustments before prices are able to stabilize, even after the significant declines in industrial metals and soft commodities this year………………………………………..Full Article: Source

How ETFs operate

Posted on 30 October 2015 by VRS  |  Email |Print

To qualify as a Ucits fund, an ETF has to abide by rules that aim to ensure the fund is well diversified to minimise market and counterparty risk. Most exchange-traded funds aim to track the performance of an index, whether that is an alternative, or a traditional market-cap-weighted index such as the S&P 500, Euro Stoxx 50 or FTSE 100.
The ETF issuer will try to ensure that the fund performs as closely as possible to the index itself. There are several ways to achieve this, but there are two main types of replication methodology – physical and synthetic. Physical replication is when the ETF holds all, or a majority of, the securities in an underlying index. Orders are typically fulfilled by exchanging baskets of securities for the ETF shares………………………………………..Full Article: Source

Currency-Hedging Creators Develop A New Approach

Posted on 30 October 2015 by VRS  |  Email |Print

One of the most successful ETF issuers in 2015 is adding three exchange traded funds to its offerings. In 2009 WisdomTree was at the forefront of a now ubiquitous movement to nullify the effect currency fluctuations were having on investor returns. Currency-hedged ETFs have multiplied since due to the ability to capture necessary diversification without exposure to volatile currencies.
The approach has developed a strong headwind in emerging markets. ETF Trends chatted with WisdomTree’s Associate Director of Research, Christopher Gannatti, to discuss details, “High interest rates have implemented a 4-5% cost on any currency-hedged ETF that tracks emerging markets. With the volatility these investments have seen this year that cost is seen as too high by WisdomTree so they’ve developed an approach that looks to capture dollar strength rather than offset currency fluctuations.”……………………………………….Full Article: Source

Yuan Slips Back to Fifth Place in Global Payments Rankings

Posted on 30 October 2015 by VRS  |  Email |Print

The yuan slipped back to fifth place in terms of usage for global payments in September, a setback that’s forecast to be short-lived as China encourages greater usage amid a push for reserve-currency status at the International Monetary Fund.
The Chinese currency’s share of transactions declined to 2.45 percent last month from a record 2.79 percent in August, when it overtook the Japanese yen to rank fourth, according to Society for Worldwide Interbank Financial Telecommunications. That’s still up from 1.39 percent in January 2014. Hong Kong accounted for 69.8 percent of global yuan payments in September, ahead of Singapore with 6.7 percent and the U.K.’s 6.2 percent………………………………………..Full Article: Source

China’s yuan joining IMF currency basket likely to increase nation’s economic impact in Asia

Posted on 30 October 2015 by VRS  |  Email |Print

If China’s yuan joins the International Monetary Fund’s benchmark currency basket, changes in its economy will probably be felt more deeply in Asian financial markets, a senior IMF official said. Changyong Rhee, director of the IMF’s Asia and Pacific Department, said estimated spillovers from China to other regional economies were already larger than expected and this could be exacerbated if the yuan, also known as the renminbi, joins the Special Drawing Rights basket.
The IMF’s executive board is due to decide in November on Beijing’s bid for the yuan to have equal billing with the dollar, euro, yen and pound sterling, and Rhee stressed he did not want to pre-judge that decision………………………………………..Full Article: Source

China to raise penalties in new carbon market rules

Posted on 30 October 2015 by VRS  |  Email |Print

China, the world’s biggest source of heat-trapping greenhouse gases, will impose tougher penalties on firms that fail to comply with emission targets, according to draft market regulations seen by Reuters on Thursday.
The draft rules, which have been circulated among market players, will be submitted to lawmakers next year for final approval. If passed, they will raise the cost of noncompliance and give emitters bigger incentives to cut their emissions and improve their reporting standards………………………………………..Full Article: Source

Prince Charles pushes for a carbon price before his visit to Australia

Posted on 30 October 2015 by VRS  |  Email |Print

Prince Charles has said putting a price on carbon is a vital part of addressing climate change, setting him on a potential collision course with his hosts during his November visit to Australia. Last year Australia became the first developed nation to repeal a carbon price scheme.
The Prince of Wales, for decades a campaigner for conservation and ecological causes, has emerged as a keen mediator on climate change in the lead-up to December’s COP21 in Paris – the United Nations summit intended to draw up a new global climate change action plan. On Thursday in London he convened a high-level meeting on deforestation and climate change at Lancaster House, next door to the prince’s home and office, Clarence House………………………………………..Full Article: Source

Commodity prices wil continue to pressure Malaysia

Posted on 29 October 2015 by VRS  |  Email |Print

Weak commodity prices will continue to put pressure on Malaysia’s fiscal and broader economic outlook next year, said Fitch Ratings. According to the international rating agency, some of the detailed assumptions for the country’s Budget 2016 looked optimistic, hence, could potentially pose some downside risk to the Government’s projections.
It added that Malaysia’s fiscal and broader economic outlook would remain under pressure from weaker commodity prices into 2016. Fitch noted that there could be a risk of Malaysia missing its 2016 fiscal deficit target of 3.1% of gross domestic product (GDP), even though the Government’s debt level would likely remain stable………………………………………..Full Article: Source

Oil majors rush cuts to hit $60 break-even

Posted on 29 October 2015 by VRS  |  Email |Print

For evidence of just how savage the oil industry downturn has become, consider Royal Dutch Shell’s decision to axe a Canadian oil sands project this week. Unusually — and in contrast to the $200bn-plus of future spending shelved by energy companies since last year’s crude price collapse — work on Carmon Creek was well under way.
This was no flight of fancy. Shell had already taken the decision to invest: it was clearing the site, procuring major equipment, building accommodation for staff, and starting work on wells. Its late move to down tools, says Anish Kapadia of energy investment bank Tudor Pickering Holt, shows how companies “are getting yet more aggressive on capex cuts and return expectations” — and suggests Shell is “moving towards the ‘lower for longer’ camp” on oil prices………………………………………..Full Article: Source

Pouring oil on troubled waters: ‘Surplus until 2017′

Posted on 29 October 2015 by VRS  |  Email |Print

As the price of oil continues its decline, economists have warned on a lack of upward price pressures for the commodity for at least another two years. Thomas Pugh economist at Capital Economics predicts oil could hit $55 per barrel for Brent crude at the end of 2015, with oil to remain in surplus for another couple of years.
“The market is still going to be in surplus by this time next year, so by the time you actually have supply and demand starting to equate, it will be well into 2017,” he told CNBC via telephone. The oil industry is full of booms and busts. The norm for oil for the last decade has been $90 - $100 per barrel, but Brent is currently trading closer to $45 a barrel………………………………………..Full Article: Source

Oil Explorers Prepare for Another Year of Depressed Prices

Posted on 29 October 2015 by VRS  |  Email |Print

The biggest oil explorers to post earnings so far are bracing for another year of deep spending cuts as the slump in energy markets shows no signs of abating. Occidental Petroleum Corp., Anadarko Petroleum Corp. and Hess Corp. reported third-quarter losses as sliding crude and natural gas prices choked cash flow, halted drilling projects and exacted billions of dollars in writedowns as once-prized oil fields dwindled in value.
Norway’s Statoil ASA and U.K.-based BP Plc also are trimming spending. For the $1.9 trillion-a-year oil industry, the bad news is just beginning. ConocoPhillips, the third-largest U.S. crude producer, is expected to post its first third-quarter loss in more than a decade on Thursday………………………………………..Full Article: Source

Low Oil Prices Could Bankrupt OPEC in 5 Years — but Crush Rest of World in 3

Posted on 29 October 2015 by VRS  |  Email |Print

Would you be happy to see the Saudis going broke? A lot of people would, seeing the swoon in oil prices as a premeditated plot from the No. 1 OPEC producer. Recent articles have crowed about the “suicidal” Saudis, who while glutting the oil market and forcing prices lower, will have run through their almost half a trillion dollars of surplus cash if oil prices remained under $50 a barrel for the next five years.
I’ve got news for you — the Saudis won’t be one of the first to go, should oil stay low. They’d be one of the last. There are a lot of oil-producing countries that rely upon oil revenue to balance their budgets. Many of them are OPEC members like Saudi Arabia, but many aren’t — and some are U.S. allies………………………………………..Full Article: Source

Gold Prices: How Gold Will Beat Stocks in 2016

Posted on 29 October 2015 by VRS  |  Email |Print

Demand for gold bullion remains strong and suggests gold prices have a huge “for sale” sign on the precious metal. In Profit Confidential, I have talked about how demand for gold is very strong from consumers in India and China. Demand is now getting stronger in other parts of the world.
In the first nine months of 2015, the U.S. Mint sold 670,000 ounces of gold in American Eagle coins. This figure is already 28% higher than the previous year’s gold coin sales of 524,500 ounces. At Australia’s Perth Mint, gold demand figures are astonishing. In September, the Mint sold 63,791 ounces of gold; this was the highest amount sold in any month in 2015………………………………………..Full Article: Source

Gold price pushes above $1,170/oz ahead of Fed statement

Posted on 29 October 2015 by VRS  |  Email |Print

Gold was trading above $1,170 on Wednesday morning in London in the lead-up to tonight’s Federal Open Market Committee’s statement. The spot gold price was last at $1,171.70/1,172 per ounce, up $5.60 on Tuesday’s close. Trade has ranged from $1,165.40 to $1,173.10 so far.
“The gold market looks like it is stalling but may not be ready yet to weaken,” HSBC’s James Steel said. “If gold cannot push convincingly higher soon, recent longs may become disenchanted and liquidate. Although we are price positive long term, in the near term, this could knock gold back below $1,150 quite rapidly.” The Federal Reserve will release a statement after its two-day meeting that may provide an indication of when the US will raise interest rates………………………………………..Full Article: Source

Gold ready to take its position when QE undoubtedly fails

Posted on 29 October 2015 by VRS  |  Email |Print

Even though the price of gold failed to make a decisive break above the 200 day Moving average, the price looks set to continue its upward trajectory. However, one can expect some resistance close to the 200 day MA at around the $1185 an ounce level.
After briefly breaching $1190 an ounce level, gold prices came under some renewed selling pressure as the U.S dollar gained against it major peers especially the euro. The rally in the greenback was sparked when European Central Bank (ECB) president Mario Draghi announced that the central bank would not cut rates, but at the same time, he strongly hinted that they would act later this year………………………………………..Full Article: Source

Cleaning up the precious metals industry

Posted on 29 October 2015 by VRS  |  Email |Print

UvA researchers have discovered a new material that can catalyse the decomposition of cyanide ions in process waste streams. The catalyst has been patented and attracts interest from industry. Germany’s oldest gold and silver refining company Heimerle + Meule is now examining the possibilities of using the catalyst for waste effluent treatment. The research is part of the research priority area Sustainable Chemistry.
Gold, silver, platinum and palladium are used all over the world in coins, bullion, investments, jewellery and electronics. But there is a less shiny side to these metals as well: their production and refining processes typically require large amounts of cyanide salts, which are highly toxic………………………………………..Full Article: Source

China Rate Cut Fails to Lift Metals Prices

Posted on 29 October 2015 by VRS  |  Email |Print

Central banks from the world’s two largest economies may be headed in different directions. Neither are doing much to help stoke moribund metals markets. Last week’s quarter-point interest-rate cut by the People’s Bank of China—its sixth since November—has failed to stir price rises in metals, even though China accounts for more than 40% of the world’s demand from aluminum to iron ore.
The looming prospect of a rate rise by the U.S. Federal Reserve and the uncertainty over its timing have meanwhile dampened hopes of a sharp uptick for metals like copper or zinc, despite recent production cuts signaled by major producers like Glencore PLC aimed at reducing global over supply………………………………………..Full Article: Source

Inside The New Approach To Actively Managed ETFs

Posted on 29 October 2015 by VRS  |  Email |Print

Recently at the annual ETF Boot Camp, Tom sat down with Stephen Clarke, CEO of Navigate Funds Solutions, to discuss the innovative way they’re approaching actively managed ETFs. The reason for not getting in to the ETF space for a lot of active managers is due to the structure in which ETFs disclose their holdings at the end of each day – exposing trades and other strategic positions.
Navigate will be launching a line of Exchange Traded Managed Funds, that will be branded as NextShares, that aims to solve that problem. They will be licensing the approach to other active managers who would like to trade in the ETF space but protect their trades privacy………………………………………..Full Article: Source

Barclays bankers build $1.7bn commodities firm

Posted on 29 October 2015 by VRS  |  Email |Print

The bankers behind the private-equity investments of Barclays in the natural resources sector bought the business from the British lender, creating a new buyout firm with $1.7 billion in assets.
The management-led deal forms Global Natural Resource Investments, a London-based private equity firm with offices in Doha, Qatar, that will focus on commodities deals outside the US oil and gas upstream sector, the company said on Wednesday in a statement. GNRI didn’t disclose how much it paid………………………………………..Full Article: Source

Barcelona Officials Plan Alternative Currency

Posted on 29 October 2015 by VRS  |  Email |Print

As humanity increasingly loses faith in debt-backed fiat currencies run by opaque central banks and corrupt governments, the city of Barcelona, Spain, is the latest to announce plans to try something new — a local currency. The goal of the proposed alternative monetary system, according to local officials, is to stimulate business in the city and surrounding areas, especially local small and medium businesses still reeling from the economic crisis that ravaged the nation in recent years.
With over three million people in Barcelona, it could become the largest experiment of its kind, according to analysts. But not everybody is convinced, with some commentators suspecting ulterior motives………………………………………..Full Article: Source

Governments to raise $22 billion from carbon pricing in 2015: report

Posted on 29 October 2015 by VRS  |  Email |Print

Governments around the world will this year raise around $22 billion from schemes putting a price on carbon dioxide (CO2) emissions such as taxes or emissions trading systems, a report on Wednesday showed. The role of carbon pricing, in efforts to curb rising emissions blamed for global warming, has gained prominence this year after several multinational companies including oil majors said such a price is needed to spur investment in low-carbon energy.
The figure is up 46 percent from an estimated $15 billion raised in 2014, the report by industry group the Climate Markets and Investment Association (CMIA) showed. “Revenues from carbon pricing appear likely to continue to increase around the world, and continuing debate will be needed about how these funds should best be used in future,” it said………………………………………..Full Article: Source

Brazil Deals Blow to Schwarzenegger-Championed Carbon Trade

Posted on 29 October 2015 by VRS  |  Email |Print

Brazil damped hopes that an international carbon trade supported by Arnold Schwarzenegger five years ago will go ahead as South America’s biggest economy has no intention of exporting credits.
Securities generated by protecting the Amazon rain forest will be needed by Brazil to meet its own emission-reduction targets and won’t be sold to another country or state, Carlos Klink, secretary of the climate change unit at the nation’s environment ministry, said Wednesday in an interview in London. California is considering importing credits from Brazil’s Acre state to comply with environmental rules at home, its Air Resources Board said Oct. 19 in a document………………………………………..Full Article: Source

Climate change deal will not include global carbon price: UN climate chief

Posted on 29 October 2015 by VRS  |  Email |Print

A climate change deal to be agreed in Paris in December will not be able to come up with a global carbon price, the United Nations’ climate chief, Christiana Figueres, said on Tuesday. Big multinational companies and investors, and most recently oil majors, have called for a global carbon price to help spur investments in low-carbon energy.
A global carbon price would help to create an incentive for operators of power plants and factories to switch to cleaner fuels such as gas or to buy more energy-efficient equipment………………………………………..Full Article: Source

Why Commodities Are Bad Investments

Posted on 28 October 2015 by VRS  |  Email |Print

Imagine an investment that has roughly the same moneymaking potential as stocks—but that tends to rise when stocks are falling and to fall when stocks are rising, and is a bit less volatile than stocks. In 2004, two Yale University professors published a groundbreaking paper that argued that commodity futures offered precisely that holy grail of investing.
Commodities, wrote Gary Gorton and Geert Rouwenhorst, achieved roughly the same returns as stocks from July 1959 through December 2004. But commodity prices tended to move in the opposite direction of stocks, were less volatile and were particularly profitable during periods of high inflation………………………………………..Full Article: Source

El Nino unlikely to have significant impact on commodity markets

Posted on 28 October 2015 by VRS  |  Email |Print

The current El Nino weather event is unlikely to cause spikes in grain prices, the World Bank has claimed. El Nino, a phase of warm weather which can occur in parts of the Southern Hemisphere, has the potential to disrupt agricultural production and affect global supplies.
But despite claims the current El Nino episode could be one of the strongest on record, a World Bank report published in recent days has stated this is unlikely to cause gains in global arable prices. The report stated: “The current El Niño episode is unlikely to cause a spike in global agricultural prices given ample supply of major agricultural commodities, weak links between global and domestic prices, and limited impact of past episodes………………………………………..Full Article: Source

The Oil Market May Need Until 2016 for Iran Supply Boost

Posted on 28 October 2015 by VRS  |  Email |Print

Iran’s crude exports are likely to remain restricted until the first half of next year, when it’s “reasonable” to expect international sanctions against the OPEC producer to be lifted, according to a U.S. government official.
Overseas shipments will probably stay at 1 million to 1.1 million barrels a day until the terms of a deal between Iran and world powers over the Persian Gulf state’s nuclear program are implemented, allowing sanctions to be lifted, said Amos Hochstein, special envoy and coordinator for international energy affairs at the U.S. Department of State. The U.S. is keeping a “very close” watch on Iranian oil exports, he said in an interview in Singapore………………………………………..Full Article: Source

BP cuts costs, bracing for $60 barrel oil until 2017

Posted on 28 October 2015 by VRS  |  Email |Print

BP, the U.K. oil giant, is slashing costs as it prepares for a long-term low oil price environment. The company is now planning for around $60 per barrel price for Brent crude until at least 2017, after a sustained fall in the price of the commodity over the past year. It also plans a further $3-5 billion worth of asset sales next year.
Its share price rose by more than 2 percent in early London trading Tuesday following the announcement. There was good news for investors in the company’s continued commitment to dividend payouts, with a quarterly dividend of 10 cents per ordinary share, expected to be paid in December………………………………………..Full Article: Source

BP – low oil price isn’t all bad news

Posted on 28 October 2015 by VRS  |  Email |Print

Two things are clear from BP’s results this morning. First, the oil major is preparing for a low oil price for the foreseeable future, saying that it is working towards a “financial frame” by 2017 that assumes a price of $60 a barrel. When I interviewed Bob Dudley at the start of the year, he said that low energy prices could last for three years.
Nothing since then seems to have changed his view. “Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well,” he said today………………………………………..Full Article: Source

Oil Prices Extend Fall on Glut Fears

Posted on 28 October 2015 by VRS  |  Email |Print

Oil prices slid to two-month lows Tuesday on expectations that U.S. crude stockpiles grew for the fifth straight week last week. Light, sweet crude for December delivery recently fell $1.01, or 2.3%, to $42.97 a barrel on the New York Mercantile Exchange. Prices traded at the lowest intraday levels since Aug. 28. Brent, the global benchmark, fell 74 cents, or 1.5%, to $46.80 a barrel on ICE Futures Europe.
The U.S. Energy Information Administration is due to release weekly inventory data on Wednesday, and traders expect the agency to report that stored supplies of U.S. oil grew last week as refineries bought less crude while performing seasonal maintenance………………………………………..Full Article: Source

Oil Price Not Done Crashing, Saudi Arabia Could Be Broke In Five Years: Reports

Posted on 28 October 2015 by VRS  |  Email |Print

The bad news keeps piling on for the oil industry and the countries that rely on it. Despite oil prices having already fallen 60 per cent from their highs last year, investment bank Goldman Sachs says they could suffer another major decline as storage space for refined fuel gets closer to full capacity.
Meanwhile, a report from the IMF warns that Middle Eastern oil-exporting countries, particularly Saudi Arabia, could go broke within five years if oil prices stay at current low levels. Storage of refined fuels in the U.S. and Europe is “nearing historically high levels,” Goldman Sachs said in a report issued Monday and obtained by Reuters………………………………………..Full Article: Source

Gold at mercy of US rate decision – Barclays

Posted on 28 October 2015 by VRS  |  Email |Print

The gold price is at the mercy of the US Federal Reserve’s decision on interest rates amid an uneventful physical market, Barclays said. Gold should remain supported if there is no policy action at the October and December meeting’s of the Federal Open Market Committee (FOMC), the bank said in a research note on Tuesday.
It expects the US central bank, which will start its two-day October meeting later on Tuesday, to start to lift rates from near-zero levels from March next year. Barclays is maintaining its gold price forecast of $1,170 per ounce for the fourth quarter and $1,215 per ounce for 2016………………………………………..Full Article: Source

How Will Chinese Easing Impact Gold?

Posted on 28 October 2015 by VRS  |  Email |Print

China has been spooking the financial markets, first with its currency devaluation and now with easing the interest rates. Such unexpected moves may have a substantial impact on the prices of commodities and precious metals. As China has cut its interest rates by 25 basis point, money may flow out of the country and likely find its place in the United States.
Such flow into the United States will provide strength to the dollar, pushing the dollar-denominated gold and other precious metals lower. Lower commodity prices could discourage some investors from investing in precious metals. China’s purchasing power in commodities is a major determinant of its prices. Lower demand may further dim gold’s outlook………………………………………..Full Article: Source

What is the Fair Value of Gold? Ounces Over Dollars

Posted on 28 October 2015 by VRS  |  Email |Print

A huge reason we all tend to make these types of sophomoric mistakes is due to the fact that the bankers erased all real knowledge about sound money from textbooks and the collective conscience of society long before any of us living on this planet today had even been born.
Therefore, we were raised to believe that valuing gold and silver in terms of fake fiat currencies is acceptable, whereas if you transported a 5-year old child that lived during a period of a real gold standard persisted to the present day, that child would laugh at our foolishness regarding the manner in which we value physical gold and silver. During periods of true gold standards (and not anti-gold standards like the Bretton Woods system, that was still truly a US dollar standard), the only accepted way of valuing gold and silver was by its weight, in grams or in troy ounces………………………………………..Full Article: Source

Lithium prices tipped to rise 20 per cent by 2017 on demand for electric cars

Posted on 28 October 2015 by VRS  |  Email |Print

Prices for lithium are forecast to rise strongly in the next two years, with widespread adoption of electric cars tipped to be a game changer for the third element on the periodic table. While most demand for lithium carbonate comes from industrial companies producing ceramics and glass, Citi analyst Matthew Schembri believes demand will rise significantly when electric vehicles become mainstream and need the commodity for lithium-ion batteries.
Citi is very bullish about electric cars, and forecasts production of pure electric models (not hybrids) like the Nissan Leaf or the Tesla Model S to rise from about 150,000 in 2015 to about 290,000 in 2016………………………………………..Full Article: Source

Zinc Price Forecast: Prices Drop Slightly as Another Base Metal Emerges

Posted on 28 October 2015 by VRS  |  Email |Print

Zinc prices dropped slightly in Oct. 22 mid-morning European trade, along with aluminum and lead, but the big news comes from another base metal: copper. According to The Wall Street Journal, copper prices climbed on Oct. 22 due in part to better than expected import data from China, the world’s largest consumer of the metal. Meanwhile, Chinese refined copper imports climbed 22% for the month of September compared to September 2014.
Want a short- and medium-term buying outlook for aluminum, copper, tin, lead, zinc, nickel and several forms of steel? Subscribe to our monthly buying outlook reports! “Copper is the best-performing metal today, helped by quite positive data on Chinese metals imports,” confirmed Stephen Briggs, BNP Paribas metals analyst, told the news source………………………………………..Full Article: Source

Why Is Aluminum Trading at Its Lowest Levels Since 2009?

Posted on 28 October 2015 by VRS  |  Email |Print

Base metals and major base metal mining companies fell in the week ending on October 23, 2015. Within the base metals complex, Aluminum was the worst performer, falling ~5% last week. Anglo American (AAUKY), one of the major producers of base metals, led the descent by falling 11% last week. Also, LME (London Metal Exchange) 3M Copper fell by 2% last week and closed at 5176$ per MT, or metric ton.
Copper has been consolidating for the past two weeks. The surprise rate cut from China initially had a positive effect on metals prices, but as the dollar found major strength, these metals, including copper, fell to the lows established on October 21. The Chinese government’s meeting to draft its 5-year development plan, as well as the FOMC meeting, will help define the direction of copper prices in the short term………………………………………..Full Article: Source

Fast-Growing ETFs Dealt a Setback

Posted on 28 October 2015 by VRS  |  Email |Print

The New York Stock Exchange this month withdrew a proposal to the Securities and Exchange Commission that would have expedited the regulatory approval of some exchange-traded funds, a setback for the fast-expanding ETF industry.
What the Intercontinental Exchange Inc. unit sought is known as a generic listing standard, which would have cut months off the process to list actively managed ETFs. Listing currently requires a fund-by-fund evaluation by the SEC that can take several months. The SEC reported the withdrawal on Oct. 19………………………………………..Full Article: Source

India: SEBI Open to Changing ETF Norms

Posted on 28 October 2015 by VRS  |  Email |Print

Rooting for transparency, capital markets regulator Sebi will tweak regulatory norms pertaining to Exchange-Traded Funds (ETFs) if necessary, according to its chairman U K Sinha. An ETF is a marketable security that tracks an index, a commodity, bond, or a basket of assets like an index fund.
“Based on inputs from cross-section of experts or participants, if there is any need that further changes are required for rules and regulations of the ETFs, Sebi will be more than willing to listen to you and incorporate them,” said Sinha adding that more disclosures with regard to ETFs were required to benefit investors………………………………………..Full Article: Source

Alternative funds are taking center stage

Posted on 28 October 2015 by VRS  |  Email |Print

With the stock market careening wildly of late, it’s no surprise that investors are looking for alternatives. Nearly $4 billion flowed into alternative investment funds — often called liquid alt funds — in July, August and September, according to data from research firm Morningstar, and they have had nearly $10 billion in net inflows since the beginning of the year.
The funds invest in a wide range of asset classes and use hedge fund–like trading strategies with the objective of producing returns not closely correlated with stocks or bonds………………………………………..Full Article: Source

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