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Commodities Briefing - Archive | January, 2016

Commodity Price Plunge Threatens Developing Nations

Posted on 29 January 2016 by VRS  |  Email |Print

While the severe Chinese growth recession has already played havoc with major global economic nations’ export volume in a broad spectrum of industrial products, little has been publicized regarding the “Beijing bust’s” impact on dozens of developing nations’ commodity trade, both in volume and price drops.
Many of these nations, such as some in Africa and South America, as well as Australia, had literally owed their growth to the rapacious appetite of China’s 20-year economic expansion surge. This included such basic products as thermal coal, copper, oil, iron ore, nickel, zinc, aluminum, etc. which fed the Asian giant’s seemingly unstoppable drive to world economic leadership………………………………………..Full Article: Source

Here’s how the commodity market will fare in 2016

Posted on 29 January 2016 by VRS  |  Email |Print

The latest Commodity Markets Outlook report by the World Bank has projected a decline in the price indices of all main commodities. This is partly due to persistently elevated supplies and weak growth prospects in the emerging market economies of the world.
Commodity prices have continued to slide over worries concerning the global macroeconomic growth environment, particularly the decelerating pace of China’s economy. Last year commodity markets were plagued by volatility which subsequently affected commodity-linked companies around the globe………………………………………..Full Article: Source

Russia Comments Tease Oil Market Eager for Any Glimmer of Hope

Posted on 29 January 2016 by VRS  |  Email |Print

For a few minutes, at least, there was a glimmer of hope for the world’s struggling oil producers. After months of opposing any production cuts, Russia said on Thursday it would be willing to discuss output levels with OPEC — opening the door for a deal with Saudi Arabia to revive oil prices hovering at $30 a barrel.
Brent crude, the global benchmark, surged nearly 8 percent to $35.84 a barrel almost immediately. But the joy for oil producers — and some traders — was short-lived, and the price slid back to $34. Within minutes, OPEC delegates said they knew nothing about a potential meeting with Russia next month, let alone output cuts………………………………………..Full Article: Source

IMF, World Bank move to forestall oil-led defaults

Posted on 29 January 2016 by VRS  |  Email |Print

Officials from the International Monetary Fund and the World Bank are heading to Azerbaijan to discuss a possible $US4 billion ($5.7 billion) emergency loan package in what risks becoming the first of a series of bailouts stemming from the tumbling oil price.
The Baku visit, which follows a currency crisis triggered by the collapse in crude, comes amid concern at the two global institutions over emerging market producers from central Asia to Latin America. The fund and the bank have also been monitoring developments in other oil-producing countries such as Brazil, which is now mired in its worst recession in more than a century, and Ecuador………………………………………..Full Article: Source

Iran says low oil prices will not last long

Posted on 29 January 2016 by VRS  |  Email |Print

Iranian President Hassan Rouhani said on Thursday that oil prices would not stay low for long as producers restore market balance. “The price of oil is at a low level … I don’t think it will last in the long term … The pressure on oil-producing nations means balance will be restored in the short term,” Rouhani, whose country is the third-largest producer in OPEC, said at the French Institute of International Relations.
Pragmatist Rouhani arrived in France on Wednesday on the second leg of a state visit to Europe after three days in Italy. Iran is pushing to boost oil exports now that international sanctions against it have been lifted………………………………………..Full Article: Source

Saudi Arabia well equipped to sustain oil market share

Posted on 29 January 2016 by VRS  |  Email |Print

OPEC’s oil production is expected to rise by a further 500,000 barrels per day by Q4 2016 year-on-year, according to a report released by Jadwa Investment. It said that the current period of low prices is set to remain throughout 2016, pulled down primarily as a result of persistently high oil supply.
All-out competition between members of OPEC will be the main reason for continued oversupplied markets. But Saudi Arabia remains well equipped to hold off any attempts of encroachment on its market share since it is currently the only major oil producer with spare oil production capacity, Jadwa economists added………………………………………..Full Article: Source

Hopes For An Oil Price Recovery Appear Exaggerated

Posted on 29 January 2016 by VRS  |  Email |Print

The new debate in petroleum markets appears to be over when prices will recover and to what level. When the price was $100 a barrel, many argued that any drop would be only temporary because higher costs had put a new, higher floor under prices.
And before that, the argument was that the market had entered a “new paradigm” where strong demand in countries like China would be bumping up against the “end of easy/cheap oil” and keep pressure on prices to rise. These arguments were all very appealing and eventually became widespread, as persistently high prices quieted most of the voices that argued for caution………………………………………..Full Article: Source

Believe it or not, oil is back in a bull market

Posted on 29 January 2016 by VRS  |  Email |Print

It may have been wrong to call oil’s rise a dead cat bounce last week. Everyone’s favorite cratering commodity has actually been having a pretty good run since Jan. 20. Brent crude today (Jan. 28) rose above $35 per barrel for the first time in about three weeks on news that OPEC and Russia might finally curtail their contribution to the overproduction that has the world awash in oil.
That was enough to technically put oil in a bull market, trading at 20% higher than its recent lows. Spurring today’s rally: Reuters is reporting that Russia’s oil minister said Saudi Arabia proposed cutting production by 5%………………………………………..Full Article: Source

Gold price unmoved as Fed masters the mixed message

Posted on 29 January 2016 by VRS  |  Email |Print

The gold price had been expected to settle markedly either up or down yesterday, after the US Federal Reserve issued its latest eagerly anticipated policy announcement on interest rates. In the event, it was all something of a damp squib.
Initially, the spot price of the yellow metal jumped to $1,127 an ounce, but it quickly retreated from that high and this morning was steady at $1,118 - a virtually identical level to where it has spent most of this week. This reflected the steadier sentiment that has taken hold across Europe’s equity markets in the wake of the Fed’s statement………………………………………..Full Article: Source

The gold market just lost its best measure of Chinese demand

Posted on 29 January 2016 by VRS  |  Email |Print

The Shanghai Gold Exchange has stopped publishing its weekly gold withdrawal figures, forcing the market to lose its “best measure of Chinese wholesale demand,” according to Koos Jansen, precious-metals analyst and blogger for Singapore-based bullion dealer BullionStar.
Jansen, well known for his analyses on the Chinese gold market, pointed out in a blog Jan. 26, that the SGE’s Chinese Market Data Weekly Reports on the first two trading weeks of this year don’t list gold vault withdrawal figures. He said the SGE told him those figures will no longer be published………………………………………..Full Article: Source

Investors chase gold bonds in falling stock market

Posted on 29 January 2016 by VRS  |  Email |Print

The second tranche of India’s sovereign gold bond received a better response than the first, a government official said, as a price discount and its safe haven appeal amid a slide in equities attracted investors. The world’s second biggest gold consumer plans to sell 150 billion rupees in bonds linked to the metal in the financial year ending March 31, to wean investors off buying physical gold and stem the outflow of foreign exchange spent on gold imports.
In the second tranche, 316,000 applications were received for 2,790 kg of gold worth 7.26 billion Indian rupees ($106 million), far higher than the 62,169 applications for the first tranche for 915.953 kg of gold in November………………………………………..Full Article: Source

Global Scenario Gathers Support for Precious Metals Prices

Posted on 29 January 2016 by VRS  |  Email |Print

The upheaval in the Chinese markets during the start of the new year and the continued currency devaluation in China have hurt the world markets and sparked the appeal of gold as a haven asset.
The Federal Reserve is also likely acknowledging the current economic slump. It refrained from raising interest rates on January 27, 2016. Both the delay in the rate rise and the economic downturn are beneficial for precious metals. Gold and silver have risen 2.1% and 2.5%, respectively, on a five-day-trailing basis………………………………………..Full Article: Source

Why The Gold Market Is Glittering Again

Posted on 29 January 2016 by VRS  |  Email |Print

It’s been tough finding winners in financial markets so far this year. Nearly every asset class is moving together in lockstep … to the downside. But one asset that’s been much maligned in recent years, practically given up for dead in fact, is glittering again: Gold! The Dow and S&P 500 are both down 8% year to date.
Small caps have it worse with a double-digit decline of 12.2%. China’s Shanghai Index plunged 20% in the last three weeks alone. And most commodities are still getting shellacked with nat gas down 6.7% and Oil plunging 15.1% already this year. But it looks like gold got its groove back in 2016!……………………………………….Full Article: Source

World Platinum Investment Council approved as Singapore Bullion Market Association member

Posted on 29 January 2016 by VRS  |  Email |Print

The World Platinum Investment Council (WPIC) announced it has been approved by the Singapore Bullion Market Association (SBMA) for foreign associate corporate membership. This marks the first in a series of strategic initiatives the WPIC is developing in 2016 to stimulate investor demand for physical platinum and increase the number and type of platinum investment opportunities available in Asia.
The SBMA was formed in 1993 to promote Singapore as a precious metals ‘hub’ in Southeast Asia and its existing members include ICBC Standard Bank Plc, Bank of Nova Scotia, J.P. Morgan, and UOB Bullion & Futures Ltd………………………………………..Full Article: Source

Miners still digging for victory

Posted on 29 January 2016 by VRS  |  Email |Print

Demand growth changed dramatically across metals and bulk commodities last year. It slowed in aluminium and nickel, was flat in copper and contracted in iron ore and steel. Thermal coal was a notable exception, where growth continued unabated.
As such, 2015 will be remembered as the year when long-term growth prospects were challenged with “China peak consumption” predictions brought forward for many raw materials………………………………………..Full Article: Source

Are ETFs causing volatility?

Posted on 29 January 2016 by VRS  |  Email |Print

Trading volumes in exchange-traded funds (ETFs) could be causing volatility in less liquid asset classes, fund selectors have warned. ETFs are increasingly being used at times of volatility by investors seeking to enact market views quickly. For instance, on January 15, a day when the S&P 500 fell 2.1 per cent, seven of the 10 most-traded securities in the US were ETFs.
Victor Lin, director of Credit Suisse’s quantitative equity trading strategy business, said in a note to clients that daily ETF trading volumes in the US between January 11 and 15 were 40 per cent higher than 2015 averages………………………………………..Full Article: Source

Euronext Expands Commodity Derivatives

Posted on 29 January 2016 by VRS  |  Email |Print

Euronext is launching sugar futures this autumn, before quotas are abolished in the European market, as the exchange continues to grow its commodity derivatives franchise. The pan-European exchange operator is launching sugar futures, subject to regulatory approvals, ahead of the European Union abolishing sugar production quotas on 30 September 2017.
The European Union is the third largest sugar producer and the second largest consumer in the world according to Euronext. Sugar futures can already be traded on rival exchange ICE, the former owner of Euronext………………………………………..Full Article: Source

Will El Nino’s sister hold sway in 2016?

Posted on 29 January 2016 by VRS  |  Email |Print

The El Nino weather phenomenon wreaked havoc worldwide last year. Its counterpart, La Nina, could cause more trouble in 2016.
The term El Nino, Spanish for “the boy,” was coined by Peruvian fishermen to refer to a warm ocean current that typically arrives around Christmas time. This warmth affects weather around the globe. Last year, it was blamed for droughts in Thailand and Indonesia, among other extreme conditions………………………………………..Full Article: Source

The Return of the Currency Crash

Posted on 29 January 2016 by VRS  |  Email |Print

Currency-market volatility has been around for decades, if not centuries. Wide gyrations in exchange rates became a staple of international financial markets after the Bretton Woods system broke down in the early 1970s, and mega-depreciations were commonplace later in the decade and through much of the 1980s, when inflation raged across much of the world.
Even through much of the 1990s and early 2000s, 10-20% of countries worldwide experienced a large currency depreciation or crash in any given year. And then, suddenly, calm prevailed. Excluding the mayhem associated with the global financial crisis of late 2008 and early 2009, currency crashes were few and far between from 2004 to 2014……………………………………….Full Article: Source

Here’s one argument why China will lose its currency war

Posted on 29 January 2016 by VRS  |  Email |Print

A currency war is not all it’s cracked up to be. That is the verdict from Citi’s currency expert Steven Englander, who argues that efforts by central banks to devalue their currencies to maintain an edge over competing economies are not as effective as many are led to believe.
“Policy makers and investors talk about currency depreciation as if it is the ultimate weapon of economic policy, but that overstates its importance in driving activity,” said Englander in a report. “The economic bang for the depreciating buck, or yen or euro is relatively small.”……………………………………….Full Article: Source

Shanghai carbon exchange aids first custody contract to build trade

Posted on 29 January 2016 by VRS  |  Email |Print

The Shanghai Environment and Energy Exchange announced its first “custody contract” on Thursday, allowing a brokerage to borrow permits from a local company and trade them, in a bid to inject liquidity in a depressed market.
China’s government will launch a nationwide carbon trading market next year and is working on plans to harmonise the seven existing pilot markets, but it remains unclear how many of the existing local exchanges will survive the transition………………………………………..Full Article: Source

Global Carbon Market Faces Diplomatic Minefield in Oil Slump

Posted on 29 January 2016 by VRS  |  Email |Print

After 195 nations agreed to develop the first truly global greenhouse-gas market last month, climate diplomats from China to Brazil must now haggle over how the program will work against a backdrop of the cheapest oil in more than a decade.
Negotiators have given themselves less than a year to agree on rules for a universal market-based emissions-reduction system under the Paris climate pact. To get there, they have to overcome any objections from nations reliant on fossil fuels and create a framework that covers an unprecedented range of national emissions targets………………………………………..Full Article: Source

How to play commodities ahead of the Fed

Posted on 28 January 2016 by VRS  |  Email |Print

Is the Fed about to give commodities a much-needed boost? Gold tempered recent gains ahead of the Federal Reserve statement Wednesday. But if the central bank sounds dovish in its release at 2 p.m. ET, gold and other metals could be ready to surge.
In December, the Fed raised the federal funds rate for the first time in almost a decade. However, Phillip Streible of RJO Futures said he doesn’t expect another rate hike for the rest of 2016. The absence of further rate increases should lead to a weaker dollar and higher gold prices………………………………………..Full Article: Source

Commodities Junk Faces More Pain Amid Contagion Threat, UBS Says

Posted on 28 January 2016 by VRS  |  Email |Print

A prolonged slump in oil prices promises more pain for commodities-related debt and threatens to spread to other parts of the leveraged-finance market, according to UBS Group AG. Energy bonds have borne the brunt of crude’s plunge to a 12-year low, falling 10 percent this year after a 24 percent drop last year.
With no end in sight to the oil slump, the market may not be adequately pricing in defaults or compensating investors for mark-to-market and liquidity risks for lower-rated junk companies, UBS strategists led by Matthew Mish wrote in a note Wednesday………………………………………..Full Article: Source

Commodities slump hurting already poor African countries (Video)

Posted on 28 January 2016 by VRS  |  Email |Print

Falling commodity prices have hit African mining countries like Mauritania, Guinea and Liberia hard. Softening demand from China isn’t making things easier.……………………………………….Full Article: Source

Oil price: ‘we’re going to see more fireworks’

Posted on 28 January 2016 by VRS  |  Email |Print

Oil has steadied at a still-low $31 a barrel, with a major report on US inventories due later. The oil price endured wild swings on Tuesday, rising more than six per cent at one point to above $32 a barrel and touching session lows below $29.
Both the international and US benchmarks are extremely volatile at the moment as the determination of many analysts that painfully low and loss-making prices must soon turn higher runs up against stubborn negative sentiment on excess supplies. A sustained recovery remains unlikely until there is at least some movement from larger producers on output………………………………………..Full Article: Source

Crude oil price to surpass $100 US by 2040, National Energy Board says

Posted on 28 January 2016 by VRS  |  Email |Print

The National Energy Board says crude oil prices are projected to rise to more than $100 US a barrel by 2040. Peter Watson, the board’s chairman and CEO, says in a prepared text of a speech that the regulator is taking a long-term view of the country’s energy future in a report.
Watson, who is set to speak before the Toronto Region Board of Trade, says the outlook is a challenging undertaking given the current, uncertain economic environment. Since mid-2014, the global price of crude has fallen about $80 US a barrel down to about $30 US a barrel………………………………………..Full Article: Source

World Bank and Credit Suisse slash oil price forecast for 2016

Posted on 28 January 2016 by VRS  |  Email |Print

Both the World Bank and Credit Suisse recently reduced its oil price forecast for 2016. This is amid increasing supply of oil and low demand prospects from emerging markets.
While the Washington-based institution forecast crude oil prices at $37 (£26, €34) a barrel for 2016 by using an average of Brent, Dubai and West Texas Intermediate (WTI) oil prices equally weighted, Credit Suisse projected that Brent will average $36.25 a barrel and WTI Crude will trade at a premium of $1.50 to Brent in 2016………………………………………..Full Article: Source

Saudis battle for oil market supremacy

Posted on 28 January 2016 by VRS  |  Email |Print

By abandoning the tight rein it held for decades on the oil market, OPEC heavyweight Saudi Arabia launched a battle for control that sent crude prices plummeting. It has been a painful fight, experts say, but with its vast resources the Gulf kingdom is showing no signs of giving up.
The huge drop in oil prices since mid-2014, from more than $110 a barrel to around $30, followed a decision by the Saudi-influenced Organization of the Petroleum Exporting Countries not to cut output as it had in the past to keep prices high………………………………………..Full Article: Source

Russians want to talk to OPEC about output, pipeline chief says

Posted on 28 January 2016 by VRS  |  Email |Print

Russian officials have decided they should talk to Saudi Arabia and other OPEC countries about output cuts to bolster oil prices, the head of Russia’s pipeline monopoly said on Wednesday, remarks that helped spur a sharp rise in world prices.
Oil futures surged more than 5 percent after the comments by Nikolai Tokarev, head of oil pipeline monopoly Transneft, which gave the strongest hint yet of possible cooperation between the top non-OPEC oil producer and the cartel to try to reverse a record glut………………………………………..Full Article: Source

Bright prospects for gold in 2016: Survey

Posted on 28 January 2016 by VRS  |  Email |Print

The quantum of gold supply dropped seven per cent in the December 2015 quarter owing to a four per cent fall in global mine output, according to GFMS Thomson Reuters’ Gold Survey: Q4 2015 Review and Outlook, released on Wednesday.
This is the largest quarterly reduction since 2008 and an all-time high for fourth quarter demand. Producers and mines that hedge (selling future production when they see prices falling) have started de-hedging (buying back their forward sales as they expect prices to recover)………………………………………..Full Article: Source

The Financial Economics Of Gold Markets

Posted on 28 January 2016 by VRS  |  Email |Print

Gold is one of the most malleable, ductile, dense, conductive, non-destructive, brilliant, and beautiful of metals. This unique set of qualities has made it a coveted object for most of human history in almost every civilization, and there have been active gold markets for over 6,000 years Green (2007).
As money, as an investment, as a store and source of value, hundreds of papers have been written on Gold. This review provides a state of the art overview of this voluminous research, and acts as an introduction to this special issue of the International Review of Financial Analysis, while also assisting as a source of reference for future research………………………………………..Full Article: Source

Precious Metals Glitter as Haven in Rubble of Resources

Posted on 28 January 2016 by VRS  |  Email |Print

As oil’s slump prolongs the worst resources rout since the 2008 financial crisis, the allure of precious metals is at least giving some commodity investors a return on their money. The Bloomberg Commodity Index, which tracks returns from 22 raw materials, dropped to a 25-year low earlier this month as gauges of energy, industrial metals and agriculture slid.
By contrast, a measure of precious metals climbed. Gold’s appeal as a safe haven is “back in vogue” on concerns about further contagion from China, volatile stock markets and tensions in the Middle East, Citigroup Inc said in a Jan. 19 report………………………………………..Full Article: Source

Mining sector won’t recover anytime soon - Moody’s

Posted on 28 January 2016 by VRS  |  Email |Print

There is little light on the horizon in the mining sector and it is unlikely to return to normality for years to come, said rating agency Moody’s Investors Service. “We believe that the current severe downturn in the mining industry represents a fundamental shift in the operating environment and that, as a consequence, a wholesale recalibration of ratings is required,” Moody’s said.
The slump is unprecented and no mere normal cyclical downturn, said Moody’s, adding that stress on companies in the metals and mining industry could surpass that seen during the 2008/2009 financial crisis………………………………………..Full Article: Source

More mining M&A expected amid commodity slump

Posted on 28 January 2016 by VRS  |  Email |Print

Mining companies have been in survival mode, walking a tightrope on the slump in commodity prices and demand. Commodity producers across the board are all feeling the pinch. Copper and platinum prices are at a ten-year low, iron ore continues to fall and other bulk commodities are following a similar track.
Adding to the pressure is the slowdown of China’s economy on the back of the country’s ailing manufacturing sector, which has prompted jitters in global markets. The commodities slump has hit SA particularly hard, with the impact exacerbated by local factors such as government’s interventions in the mining sector, labour instability and erratic power supply………………………………………..Full Article: Source

NYSE’s $2 Trillion ETF Business Sees Heightened Competition

Posted on 28 January 2016 by VRS  |  Email |Print

NYSE Group Inc. may still be the king of exchange-traded funds among U.S. stock markets, but challengers to the throne are gaining ground. Last year, a record 23 ETFs left the company’s NYSE Arca exchange, shifting their listing to rival markets, according to data compiled by Bloomberg.
BlackRock Inc., the world’s largest asset manager, this month said it was diversifying by moving 11 iShares ETFs away from NYSE Arca, the first time it’s yanked funds from the exchange. While the vast majority of ETFs still list at NYSE Arca — its funds amount to about 94 percent of the total market value of all U.S. ETFs — other exchanges are making inroads as investors increasingly use the products. ……………………………………….Full Article: Source

The best ETFs for 2016

Posted on 28 January 2016 by VRS  |  Email |Print

Investors could learn a thing or two from the ice cream business. Since 1945, Baskin-Robbins has released more than 1,300 flavours. Yet most of us opt for one of just a handful of classics, including chocolate, mint chocolate chip and pralines and cream. The single most popular flavour hands down? You guessed it. Vanilla.
A quarter century since exchange-traded funds arrived in Canada, there are more than 400 ETFs trading on the Toronto Stock Exchange alone, and at least 2,000 trading on stock exchanges around the world. Most will appeal to just a tiny percentage of investing palettes………………………………………..Full Article: Source

Ghana: Lack of cooperation stalls commodity exchange agenda

Posted on 28 January 2016 by VRS  |  Email |Print

The country is likely to miss its June 2016 deadline of starting the commodity exchange market due to the lack of support from some stakeholders, the Project Coordinator, Mr Robert Dowuono Owoo, has said. He said some of the potential actors within the commodity exchange market had failed to give their full backing to the project because they perceived it as a threat to their businesses.
“Some of them have been in this business for a long time and they see the coming into being of the exchange as a competition to their businesses. They think the exchange is going to engage in the buying and selling of agricultural products,” he stated………………………………………..Full Article: Source

Currency War in Asia

Posted on 28 January 2016 by VRS  |  Email |Print

Billionaire investor George Soros will not win the ‘war’ he is waging against the Chinese currency, according to the People’s Daily, Beijing’s state-run newspaper. George Soros declared a war on the Chinese currency at the World Economic Forum at Davos, and his influence has already affected fluctuations at global financial markets and subjected the Asian currencies to even greater speculative pressure.
However, the challenge Soros has levied against the renminbi and Hong Kong dollar is “doomed to fail, without any doubt,” the newspaper has declared. In fact, Soros’ attacks against the Asian currencies may in fact help China deepen fiscal and financial cooperation with other countries in the region………………………………………..Full Article: Source

Climate targets suffer as carbon price slumps

Posted on 28 January 2016 by VRS  |  Email |Print

Political gridlock and collapsing commodities sent the carbon price in the EU’s Emissions Trading System spiraling to a 20-month low this week, making it even more unlikely that polluters will be encouraged to cut greenhouse gas emissions.
The plummeting price is a blow for the already reeling ETS, which was supposed to be the EU’s main vehicle for getting polluters to cut emissions but has so far been plagued with problems. Under the system, companies receive or buy permits to emit a ton of CO2, with the goal of prompting them to steeply reduce emissions over time………………………………………..Full Article: Source

Beijing carbon market to extend pilot trading

Posted on 28 January 2016 by VRS  |  Email |Print

Beijing’s carbon market will continue to trade local permits even after a three-year pilot phase expires in June, its market regulator said, seeking to allay worries that cancellation of permits could trigger a price collapse.
If extended to the six other pilot exchanges, the move could help manage volatility arising from the expiry of the current phase of trading and the establishment of a nationwide market, now delayed until next next year………………………………………..Full Article: Source

EU Market: Carbon defies energy gains to dip back below €6

Posted on 28 January 2016 by VRS  |  Email |Print

EU carbon prices fell in the face of a rising energy complex on Wednesday but kept well above the previous session’s 20-month low in a slightly calmer session than recent chaotic trading days.
The Dec-16 EUA contract ended down 17 cents or 2.8% at €5.93, at the lower end of the day’s €5.79-6.12 range, on heavy turnover of almost 20 million. The benchmark carbon contract kept some distance from Tuesday’s nadir of €5.61 but it remains down 28.5% on the year, a fall mostly blamed on speculative selling………………………………………..Full Article: Source

World Bank slashes outlook for 80% of commodity prices

Posted on 27 January 2016 by VRS  |  Email |Print

The World Bank has cut its price forecast for 80 percent of the world’s major commodities as oversupply and weaker emerging market growth prospects weigh on demand. In its latest report, out Tuesday, the bank has cut its 2016 forecast for crude oil prices to $37 per barrel, down from $51 per barrel in its October report, citing the sooner-than-anticipated resumption of exports by the Islamic Republic of Iran and greater resilience in U.S. production.
Oil prices fell by 47 percent in 2015 and are expected to decline, on an annual average, by another 27 percent in 2016, according to the World Bank………………………………………..Full Article: Source

Commodity producers face tough times on bearish market

Posted on 27 January 2016 by VRS  |  Email |Print

Commodity bears are testing nerves of producers. Several commodity producers, especially those related to metals and US shale, have blinked and cut production. However, there is always a limit to the extent they can cut production. Prices are at multi-year lows — metals around 7-8 year lows, oil at 12-year lows. Gold and silver are no exceptions and so are other commodities like iron ore, steel and coal.
Most resource commodities are in a bear market, down significantly from their peaks, largely due to lower demand. The criteria to indicate whether commodities are in a bear market is when a commodity is down 50% or more from its peak or is around its long term low levels………………………………………..Full Article: Source

Oil prices to stay near current level throughout 2016, World Bank says

Posted on 27 January 2016 by VRS  |  Email |Print

Bank forecast plays down likelihood of further collapse with average price of oil expected to stabilise below $40 a barrel. The World Bank has slashed its forecast for oil prices this year, saying the cost of a barrel of crude will stay near its current lows for the rest of 2016.
The Washington-based institution said a glut of oil that sent prices crashing by almost half last year and another 27% this month will continue to dominate the market for the next year………………………………………..Full Article: Source

World Bank slashes oil price forecast to $37 a barrel

Posted on 27 January 2016 by VRS  |  Email |Print

The World Bank on Tuesday dramatically revised down its forecast for crude oil prices, predicting they would average just $37 a barrel this year and warning commodity markets to brace themselves for the possibility of a much sharper than expected slowdown in emerging economies.
The new forecast — down from a predicted $52 average for 2016 just three months ago — underlines how rapid the recent fall in oil prices has been and the growing concerns at the World Bank and elsewhere over the link between tumbling oil and the health of emerging economies………………………………………..Full Article: Source

Global oil prices to remain low throughout 2016: analyst

Posted on 27 January 2016 by VRS  |  Email |Print

Global oil prices are expected to remain low in the near future according to analysts, even though the price has lately climbed to about 30 U.S. dollars a barrel. On Monday, the West Texas Intermediate for March delivery moved down 1.85 U.S. dollars to settle at 30.34 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery decreased 1.68 dollars to close at 30.5 dollars a barrel on the London ICE Futures Exchange.
Crude oil prices began to recover when the United States faced a patch of extreme cold weather last week, while Europe raised hopes of more economic stimulus measures………………………………………..Full Article: Source

Kuwait hints OPEC ready to ‘cooperate’ to stabilize oil market

Posted on 27 January 2016 by VRS  |  Email |Print

Kuwait’s OPEC Governor Nawal al-Fuzaia hinted on Tuesday that the Organization of the Petroleum Exporting Countries is ready to cut production in an effort to stem the persistent slump in oil prices. The governor told an energy forum in Kuwait that the cartel is ready to “cooperate” with others to stabilize the oil market, according to media reports.
“OPEC is willing to cooperate with producers outside the group if they show that they are serious about cooperating with OPEC. Non-OPEC producers keep on making statements that they are willing to cooperate, but the reality is different,” she said, according to Dow Jones Newswires………………………………………..Full Article: Source

More bad news from investor who called $30 oil a year ago

Posted on 27 January 2016 by VRS  |  Email |Print

Early last year, Mark Yusko, founder and CEO of Morgan Creek Capital Management, predicted crude oil would approach $30 a barrel and deflation would become the main economic headwind for the developed world, rather than the inflation with which the market had been obsessing.
Yusko, whose dour market views were prescient, doesn’t have any brighter view of economic or market conditions now. The easing of sanctions on Iran and Saudi Arabia’s reluctance to cut production are among the factors that will continue to crush energy prices………………………………………..Full Article: Source

Gold price likely to rise above $1 200/oz by year-end – GFMS

Posted on 27 January 2016 by VRS  |  Email |Print

The gold price is set for a gradual recovery this year, particularly in the second half, driven by improving fundamentals, Thomson Reuters GFMS said in its latest gold survey. The ‘Gold Survey 2015 Q4 Update & Outlook’ report, released on Tuesday, noted that the gold price would trade above $1 200/oz towards year-end and would average $1 164/oz.
“Once it becomes clear that the gold price is on the road to recovery, we are likely to see a rebound in investor interest from key Asian markets, particularly if concerns about the emerging market slowdown and weakening currencies persist,” the report noted………………………………………..Full Article: Source

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