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Commodities Briefing - Archive | February, 2016

China still a draw for global food commodities, says expert

Posted on 29 February 2016 by VRS  |  Email |Print

China will still be a major player in world food commodities in the coming years, despite its current economic issues and slowing growth. HSBC’s Mark Berrisford-Smith suggested while China’s growth was slowing, the impact of economic changes in the country should not be overestimated.
He said China’s purchases of farm goods could vary dramatically and the country’s wheat purchases were ’all over the place’. “Sometimes it is just because they buy other things,” he said. “They [currently] buy less [milk] powder and more liquid. They are still a major market for agricultural products and they will continue to be.”……………………………………….Full Article: Source

This chart suggests Chinese demand for commodities will remain weak in 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Last week we brought you the news that new home prices in the southern Chinese city of Shenzhen soared by more than 50% in the 12 months to January, a figure that put the likes of New York, London and Sydney to shame in terms of annual rates of growth.
However, while prices are ripping higher in Shenzhen, along with other major Chinese centres such as Shanghai and Beijing, the gains elsewhere in the country are nowhere near as strong, doing little to lift sentiment towards the outlook for construction, commodity demand or a broader housing market recovery in China in the period ahead………………………………………..Full Article: Source

India: What commodity markets want from FM

Posted on 29 February 2016 by VRS  |  Email |Print

The Indian markets are gearing up for the big event today — the Union Budget. We take a look at what the commodity market participants expect from it. If there is one wish that tops the list for almost all participants in the commodity sector, it is the removal of the commodity transaction tax (CTT) that was introduced in July 2013.
This tax is levied on the sale transaction of the commodity futures except for exempted agricultural commodities such as chana, soyabean, turmeric, etc. The introduction of this tax has taken trading volumes sharply lower in both the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX)………………………………………..Full Article: Source

Oil prices rise, signs mount that market is bottoming out

Posted on 29 February 2016 by VRS  |  Email |Print

Crude futures rose in early trading on Monday after gaining over 15 percent last week, with some indicators pointing to the possibility the market is showing signs of bottoming out. Analysts said that first signs of a strengthening market outlook were appearing after a 20-month rout that has seen prices fall by 70 percent.
“The U.S. crude market also seems to have passed the worst point and crude runs should start creeping higher taking pressure off inventory levels. The latest EIA data on U.S. production is also supportive as it indicates that the low prices are finally having an impact,” said Richard Gorry, director of JBC Energy Asia………………………………………..Full Article: Source

Why the oil price is exerting such a strong pull on equity prices

Posted on 29 February 2016 by VRS  |  Email |Print

As we head into March, investors are worried that we could be about to witness an outbreak of market turbulence amid waning faith in the world’s top central banks. In the first two months of the year, there’s been one overriding pattern at work: where the oil price goes, global equity markets inevitably follow.
Last week was no exception, with the price of oil climbing as supply disruptions affected northern Iraq and Nigeria. The US sharemarket also notched its second consecutive week of gains, finishing 1.5 per cent higher………………………………………..Full Article: Source

French central bank head cautions on oil price impact

Posted on 29 February 2016 by VRS  |  Email |Print

The European Central Bank could extend money printing, the head of France’s central bank told a German newspaper on Sunday, as the long-term impact of low oil prices weighs on euro zone economies.
ECB governors from across the euro zone, including France and Germany, will meet in early March to decide whether to adjust interest rates or extend a scheme known as quantitative easing, creating money to buy government bonds in a bid to revive inflation and boost recovery………………………………………..Full Article: Source

Buhari to OPEC: Oil price crash unacceptable

Posted on 29 February 2016 by VRS  |  Email |Print

President Muhammadu Buhari in Doha, Qatar, told member states of Organisation of Petroleum Exporting Countries, OPEC, and non-OPEC members that the continued crashing of oil prices was no longer acceptable.
He, as a matter of of urgency, called on all other stakeholders in the sector, especially the oil producing nations to articulate ways of rising up to the challenges as the development had seriously affected the economy of many nations………………………………………..Full Article: Source

Gold Becomes the Biggest Winner of 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Gold’s comeback is dominating 2016. The precious metal is the year’s best-performing major asset. Its 15 percent gain is topping gauges of high-yield and investment grade bonds, Treasuries, all currencies and major stock indexes in developing and emerging countries.
Turmoil across global equity and currency markets has sparked demand for a haven. Speculators raised their net-long position in gold to the highest in a year………………………………………..Full Article: Source

How To Trade The Rebound In Gold Prices

Posted on 29 February 2016 by VRS  |  Email |Print

After being out of favor for three years, gold is shining again, gaining close to $200 in the last month alone. Technical analysts are very excited with this big jump in the price of the yellow metal, as the gold chart recently formed a “golden cross,” whereby the 50-day moving average is trading above the 200-day moving average, suggesting that the gold rally has legs.
Traditionally gold is a good hedge against the prospect of runway inflation. But there’s not much of that around in most parts of the world these days. However, there’s plenty of anxiety over central bank policies that have left investors confused over the direction of interest rates and major currencies………………………………………..Full Article: Source

Six Reasons To Buy Gold In 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Gold bullion and gold mining stocks have rallied 18% and 51%, respectively, in recent months after a brutal bear market over the last five years. Given gold’s proven ability to hold its value in the face of rising inflation and reckless monetary policy, we believe it plays an important role in any diversified portfolio.
At Evergreen Gavekal, we believe it may be time to to start initiating or adding to additional gold holdings for six reasons. Technical trading patterns suggest gold may finally be breaking out into a bull market (we do caution, however, that it appears to be temporarily over-bought)………………………………………..Full Article: Source

Silver Prices: This Will Continue to Lift Silver Prices Higher

Posted on 29 February 2016 by VRS  |  Email |Print

Gold and silver prices are being driven higher by global economic weakness and the growing number of central banks implementing negative interest rates. While gold and silver prices normally have a negative relationship to a strong U.S. dollar and low interest rates, that’s not the case this time around.
And until the global economy registers sustainable growth, gold and silver will continue to be one of the most attractive investments out there. After years of unsustainable double-digit growth, the stock market is giving up some well-deserved ground. Not because of profit-taking, but because fundamentals are catching up with share prices………………………………………..Full Article: Source

Here’s how to play gold: Technician

Posted on 29 February 2016 by VRS  |  Email |Print

Maybe the goldbugs will finally strike gold. After enduring years and years of losses, bullion is tracking for its best month since January 2012, up 9 percent. And according to a highly regarded technician, the hot commodity is about to get even hotter.
“I think we can squeeze a little bit more out of this trade” said Ari Wald of Oppenheimer on CNBC’s Fast Money last week. According to Wald’s chart work, the recent price action in gold is strikingly similar to the activity in 1999 when the commodity reversed a multi-year downtrend and started to form a base………………………………………..Full Article: Source

China’s commodities timebomb is cause to reach for the valium

Posted on 29 February 2016 by VRS  |  Email |Print

What can you make of a week where, on one day, stocks go like a rocket but metals fall badly and, the next day, the Dow retreats but metals are up? Or a week in which, on the day the Shanghai G20 meeting kicks off, Shanghai stocks give up 6.4 per cent (with many stocks falling the maximum permitted 10 per cent)?
What to make of Goldman Sachs remaining bearish on gold but Deutsche Bank recommending buying physical metal as ­“insurance”. And why is China Steel hiking prices by 3.1 per cent when the country’s steel mills are running at about 70 per cent capacity?……………………………………….Full Article: Source

Nickel And Diming Your Nickel ETNs

Posted on 29 February 2016 by VRS  |  Email |Print

For investors who want to get involved with action in nickel without getting involved with nickel futures on the London Metals Exchange, they can turn to ETNs. When it comes to these nickel ETNs, not all are created equal. This tempted us to do a side-by-side comparison to help investors and traders alike determine whether or not they are using the proper nickel ETN for their needs.
While there is one significant thing in common with these two funds, the differences are all too often overlooked. Assuming one nickel ETN is the same as the other is a foolish mistake that could be costly over time. ……………………………………….Full Article: Source

It’s Getting Harder for Currency Traders to Make Money

Posted on 29 February 2016 by VRS  |  Email |Print

The $5.3-trillion currency market is getting harder for traders to make money in as price changes that once took months or weeks now happen more quickly, says Hugh Killen, Westpac Banking Corp.’s head of trading for foreign exchange, fixed income and commodities.
Liquidity is drying up because investors and banks are shying away from taking risk, and that makes for sharper, quicker currency turns, said Killen, whose career in financial markets spans 27 years and positions in Sydney, London and New York………………………………………..Full Article: Source

Yen, not yuan, emerges as currency worry at G-20 meeting

Posted on 29 February 2016 by VRS  |  Email |Print

China’s currency was expected to be one of the the main topics at this week’s Group of 20 meeting. Instead, Japan’s yen and monetary policy were identified as a source of concern for some officials from the world’s leading economies.
“The debate was also about Japan, to be honest — there was some concern that we would get into a situation of competitive devaluations,” Eurogroup chief Jeroen Dijsselbloem said in Shanghai. Once one country devalues it’s currency, “the risk is very large that another follows and we get into competitive devaluation,” Dijsselbloem told reporters………………………………………..Full Article: Source

Green Business 2022: The new Silk Road

Posted on 29 February 2016 by VRS  |  Email |Print

In the latest in our Green Business 2022 series, ECIU’s Richard Black envisages a world where clean tech has come to dominate, and Europe has been comprehensively outmaneuvered by a resurgent China.
It’s now just seven years since Nobel Peace Prize-winner Laurent Fabius brought down the gavel on the seminal 2015 United Nations climate summit in Paris; and it’s astonishing, looking back, to see just how much that event re-shaped the world for green business………………………………………..Full Article: Source

Five things to know about carbon pricing

Posted on 29 February 2016 by VRS  |  Email |Print

Prime Minister Justin Trudeau meets with the premiers in Vancouver this week to discuss climate policy. The Liberal environmental platform states: “We will ensure that the provinces and territories have adequate tools to design their own policies to meet these commitments, including their own carbon pricing policies.”
Here are five things to know about putting a price on carbon: 1. The point of carbon pricing is to charge producers and consumers for the cost of the carbon pollution they are discharging into the atmosphere, to discourage polluting behaviour, reward innovation in energy efficiency and, depending on how the system is designed, potentially to produce revenues for addressing environmental impacts………………………………………..Full Article: Source

NZ ministers dismissed carbon price floor -Treasury

Posted on 29 February 2016 by VRS  |  Email |Print

New Zealand Cabinet ministers have already considered and dismissed putting a floor price on carbon permits in the emissions trading scheme, even though the issue is part of the ongoing ETS review, a confidential Treasury document has showed.
The confidential Treasury briefing on the discussion paper accompanying the ETS review was written on Nov. 6 last year, less than three weeks before the government launched its ETS review, but was released last week under the Official Information Act, NZ-based Carbon News reported………………………………………..Full Article: Source

China Tries to Tackle Its Commodities Crisis

Posted on 26 February 2016 by VRS  |  Email |Print

China has had an overcapacity problem in its aluminum, chemical, cement, and steel industries for years. Now it’s reaching crisis levels. “The situation has gone so dramatically bad that action has to happen very soon,” said Jörg Wuttke, president of the European Union Chamber of Commerce in China, at a press conference in Beijing on Feb. 22, where a chamber report on excess capacity was released.
That report’s conclusion: “The Chinese government’s current role in the economy is part of the problem,” while overcapacity has become “an impediment to the party’s reform agenda.” Many of the unneeded mills, smelters, and plants were built or expanded after China’s policymakers unleashed cheap credit during the global financial crisis in 2009………………………………………..Full Article: Source

USDA: 2016 to be another bad year for farm commodities

Posted on 26 February 2016 by VRS  |  Email |Print

Commodity prices will not recover this year, the federal government said Thursday in a forecast that will be a blow to producers hoping for a rebound in the slumping farm economy.
The U.S. Department of Agriculture said producers should expect slumping farm income, modest declines in land values and cash rents and a less-than-favorable trade environment. Even so, the USDA declared that the financial health of the agriculture sector is strong because producers took advantage of record harvests and high prices in past seasons to strengthen their bottom line………………………………………..Full Article: Source

Big price drops for commodities over last 12 months

Posted on 26 February 2016 by VRS  |  Email |Print

The European market has proven more resilient to price declines for commodities than the global market. The latest report from the European Commission makes for grim reading, with prices for all major commodities, including grains, meat and dairy, suffering big drops in price over the last 12 months.
However, while the data shows significant declines for most commodities on the global market, European prices are still down, but have been more insulated. Grains: For 2015, the world market price of all cereal grains in December was down significantly year-on-year. Soft wheat prices were back almost 27%, while maize and barley prices took a hit of 8% and 17% respectively………………………………………..Full Article: Source

OPEC president says output freeze will work

Posted on 26 February 2016 by VRS  |  Email |Print

Oil prices could move back above $50 a barrel within a year as an OPEC initiative to freeze production gains support, and smaller producers go to the wall. That’s the view of Qatar’s energy minister, Mohammed bin Saleh al-Sada, who also holds the rotating presidency of OPEC.
“At the moment the best possible feasible proposal is to freeze at the level of production of January,” al-Sada said in an exclusive interview with CNNMoney on Thursday. “We think [a production freeze] will gather more and more approval because it is [in] the interest of all parties.”……………………………………….Full Article: Source

Iraq Works With OPEC, Other Oil Producers to Support Oil Prices

Posted on 26 February 2016 by VRS  |  Email |Print

In March, OPEC member states and other oil producing countries could hold a meeting to discuss the issue of the freeze of oil output to facilitate the growth of global oil prices.
“We work together with all the stakeholders, all partners within OPEC and outside, open to help renounce the price of oil, to bring it back to where it should be,” Naufel Alhassan said. Alhassan added that the surplus in the oil market could also be on the agenda of the possible meeting………………………………………..Full Article: Source

Big Banks Cut Oil-Price Forecasts

Posted on 26 February 2016 by VRS  |  Email |Print

Big banks are slashing their outlook for oil and see prices recovering more slowly than previously anticipated as the market remains caught in the grip of a supply glut. A survey of 13 investment banks by The Wall Street Journal foresees Brent crude, the international oil-price benchmark, averaging $39 a barrel this year, down $11 from the survey in January.
The banks see West Texas Intermediate, the U.S. oil gauge, averaging $38 a barrel this year, also down $11 from the previous survey. The banks have cut their price outlook in every survey since August………………………………………..Full Article: Source

Who Will Be Left Standing At The End Of The Oil War

Posted on 26 February 2016 by VRS  |  Email |Print

This is a financial cold war — nothing more, nothing less. While there are billions of reasons to cut output, and every major producing country is reeling from the loss of revenues, some are weathering the current bust better than others, but the devil is in the details, and the details contain tons of variables.
Production cost and breakeven figures that analysts enjoy bandying can trap you in bubble of black-and-white mathematics that is a few brush-strokes shy of a full picture………………………………………..Full Article: Source

Gold Sees Some Mild Profit-Taking, Chart Consolidation Following Recent Gains

Posted on 26 February 2016 by VRS  |  Email |Print

Gold prices are steady to slightly lower in early U.S. trading Thursday, on some profit-taking pressure and chart consolidation following recent good gains. The gold bulls remain in good shape, on a near-term basis. April Comex gold was last down $1.20 at $1,238.00 an ounce. March Comex silver was last down $0.112 at $15.185 an ounce.
Most world stock markets were firmer Thursday, on corrective rebounds from selling pressure seen the past couple days. U.S. stock indexes are pointed toward modestly higher openings Thursday………………………………………..Full Article: Source

What You Need to Know About Buying Gold Coins

Posted on 26 February 2016 by VRS  |  Email |Print

Gold prices are up about 15 percent in 2016 on economic turmoil, making the metal one of the strongest market performers this year. Those gains have some analysts convinced that gold may have some staying power. It has been more than four years since gold peaked at more than $1,900 an ounce, and commodities newsletter writer Dennis Gartman says the higher trend in prices suggests “the bullish case for gold is becoming easier and easier to make and to hold firmly to.”
Demand for gold-backed exchange-traded funds is strong this year, but so is the demand for gold coins. Data from the U.S. Mint show that January sales for its American Eagle bullion gold coins were the highest since 2013………………………………………..Full Article: Source

Gold prices struggle for direction near $1,240-level

Posted on 26 February 2016 by VRS  |  Email |Print

Gold futures struggled for direction in Europe trade on Thursday, swinging between small gains and losses as investors continued to monitor movements in oil and global equity markets. Market players looked ahead to key U.S. economic data later in the day to gauge if the world’s largest economy is strong enough to withstand further rate hikes in 2016.
Gold prices have been well-supported in recent weeks amid growing speculation the Fed could delay the pace of its tightening for the remainder of 2016. Prices of the yellow metal soared to a one-year high of $1,263.90 on February 11. Gold is up nearly 16% so far this year amid indications global economic and financial headwinds could make it tough for the Fed to raise interest rates as much as it would like this year………………………………………..Full Article: Source

Gold Industry: Considered as the safest bet for investment in devious times

Posted on 26 February 2016 by VRS  |  Email |Print

Gold is a precious metal and has high ductility as well as malleability, mainly used as jewellery and for investment purposes globally. Gold is currently oversold in a bearish market attributed to its escalating high prices. Gold is considered as the safest bet for investment in devious times of war and high inflation with currency fluctuations.
Recent rebellions and war events in the Middle Eastern countries of Tunisia, Libya, Egypt, Syria and now Ukraine has led to rise in investments in bullion. This has caused overselling of gold and thus rapid increase in prices worldwide. Rising prices are expected to be a major factor driving the global gold market as more and more consumers are purchasing gold as a mean of long terms investments……………………………………….Full Article: Source

Bullion investors buoyed gold demand in 2015

Posted on 26 February 2016 by VRS  |  Email |Print

Global gold demand in 2015 was virtually flat compared to 2014 at 4,212 tonnes, according to the World Gold Council’s latest Gold Demand Trends report. Despite a challenging start to the year, gold demand rebounded in the second half of 2015, as a result of sustained buying from central banks and a strong second half from China and India.
This was particularly evident in the retail investment sector, where bar and coin purchases were led by China and Europe, with support from the U.S., as investors took advantage of weaker prices amid a softening economic backdrop, financial turbulence and ongoing geopolitical tension………………………………………..Full Article: Source

3 Ways to Make Precious Metals Print Money

Posted on 26 February 2016 by VRS  |  Email |Print

From an investment standpoint, most investment managers will suggest you put 2% to 3% of your portfolio into precious metals for diversification purposes. The problem with that approach is that precious metals are highly cyclical and volatile, and they don’t have a long-term positive upward bias like equities.
That’s no good for buy-and-hold investors, and instead means that precious metals are much more suited to trading. Of course, the problem with trading precious metals is the very same cyclicality and volatility they exhibit………………………………………..Full Article: Source

How to Manage Volatility With Commodity ETFs

Posted on 26 February 2016 by VRS  |  Email |Print

In recent months, market volatility has been at the forefront of investors’ minds. John Love, president and CEO at United States Commodities Funds, believes commodity ETFs can help investors manage some of the volatility currently in the broader stock market.
United States Commodities Funds currently has 12 commodity ETFs listed in the U.S. During a phone call with media and several firms that participate in Schwab’s OneSource ETF platform, Love discussed why he thinks there’s a place for commodity ETFs in portfolios today………………………………………..Full Article: Source

Lawmakers Urge Commodities Agency to Keep Plan to Limit Futures Contracts

Posted on 26 February 2016 by VRS  |  Email |Print

Lawmakers heaped criticism on an advisory committee report to the Commodity Futures Trading Commission recommending that the agency scrap its proposed rule on position limits in derivatives trading. The report and a dissenting opinion were presented at a meeting of the commission on Thursday.
The report, which was approved 8 to 1 by the Energy and Environmental Markets Advisory Committee, says that federally mandated position limits are not necessary and that the C.F.T.C. should not enact the rule it has been working on. It adds that if the agency goes ahead with the rule, it needs substantial changes………………………………………..Full Article: Source

Japan considers making bitcoin a legal currency

Posted on 26 February 2016 by VRS  |  Email |Print

Japan’s governing Liberal Democratic party is planning to propose legal changes that would define bitcoin and other cryptocurrencies as currencies. The changes would mean bitcoin could be more tightly regulated and taxed, and are likely to lead to more investment in developing cryptocurrency infrastructure in Japan.
Tomonori Kanda, an official in the financial affairs section at the party’s headquarters, said legislative changes were discussed on Wednesday and the LDP aimed to raise the matter in parliament………………………………………..Full Article: Source

Gold moves revive memories of 1990s currency crisis

Posted on 26 February 2016 by VRS  |  Email |Print

Gold has performed better than most other major asset classes this year, rallying around 16 percent since the start of the year as investors rushed into traditional the safe haven asset.
With the price of the precious metal moving higher this week as sterling has plummeted, analysts are comparing gold’s moves to the European currency crisis in 1990s. Back then, the U.K. was forced to abandon a European currency peg in late 1992, famously helping investor George Soros make $1 billion by betting against the pound and the Bank of England………………………………………..Full Article: Source

EU Eyes Interlinked Carbon Markets From California to China

Posted on 26 February 2016 by VRS  |  Email |Print

The European Union wants to work on a plan to introduce a global system of carbon markets to help reduce heat-trapping gases and encourage investment in clean technologies, according to EU energy union chief Maros Sefcovic.
“We’re ready to explore with our international partners like China, Quebec, Ontario, Manitoba, California and South Korea the possibilities of a global system of linked markets,” Sefcovic, who is European Commission Vice President for Energy Union, said in an interview on Thursday in Brussels………………………………………..Full Article: Source

Paris Agreement sends ‘positive signal’ for carbon markets

Posted on 26 February 2016 by VRS  |  Email |Print

Nearly half of the Paris signatories are considering using carbon markets to achieve climate goals, says International Carbon Action Partnership. The Paris Agreement “provides a new impetus for a dynamic global carbon market”, according to a new study released yesterday by the International Carbon Action Partnership (ICAP) that predicts the next few years will bring a proliferation of new policies that seek to put a price on carbon emissions.
The campaign group’s latest annual report predicts that thanks to the Paris Agreement and its specific commitment to support expanding carbon markets enthusiasm for market-based mechanisms for tackling emissions is rising around the world, with a number of countries trialling new pricing systems………………………………………..Full Article: Source

Crash in commodity prices takes a toll on Canada’s corporate giants

Posted on 25 February 2016 by VRS  |  Email |Print

Two of Canada’s largest companies clarified Wednesday exactly how much the ongoing crash in crude oil prices has cut into their bottom lines. Royal Bank of Canada missed expectations for first quarter profit as a result of more provisions being set aside for potentially bad loans to oil and gas producers.
Encana, meanwhile, actually beat quarterly expectations despite reporting a net loss of more than $600-million along with plans to cut its dividend by nearly four fifths and its workforce by 20 percent; equating to several hundred layoffs. “There is no question that persistently low oil prices are tough for our clients in affected regions,” RBC chief executive Dave McKay said……………………………………….Full Article: Source

Japan Stocks Rebound as Commodities Stabilize

Posted on 25 February 2016 by VRS  |  Email |Print

Japanese stocks rebounded amid a report the government will boost budget spending, tracking a late-afternoon rally in the U.S as crude oil and copper prices stabilized. Gold declined with government debt in Asia.
The Topix index snapped a two-day drop, with construction companies and iron and steel producers driving gains after Asahi TV reported Japan is considering an extra budget of about 5 trillion yen ($45 billion), citing unidentified ruling party officials. Banks led Australia’s benchmark lower despite a recovery in U.S. crude above $32 a barrel and a rebound in copper futures………………………………………..Full Article: Source

Oil Producers Should Rebalance Markets, Iraq Official Says

Posted on 25 February 2016 by VRS  |  Email |Print

Oil producers in and outside the Organization of the Petroleum Exporting Countries should act promptly to rebalance crude oil markets, Iraq’s governor to OPEC said, Summer Said reports. But Faleh al-Amri said sagging prices weren’t related to Iraq’s oil production, which has been growing steadily and will continue to do so.
Iraq is ready to cooperate in close consultation with all producers to maintain market stability and seek a fair price, but the country will also try to keep its share of global markets through “fair and reasonably flexible marketing policies,” Mr. Amri said………………………………………..Full Article: Source

Why You Should Cheer For Higher Oil Prices

Posted on 25 February 2016 by VRS  |  Email |Print

Today the rebound in oil led a significant turnaround for stocks. With that, the broader sentiment of uncertainty across markets tends to abate. Broader commodities swung from negative to positive. And yields on the U.S. 10-year Treasury, which were in deep decline this morning, swung to positive territory by the afternoon.
If you own stocks, a house, have a job or need to eat, you should cheer for higher oil prices. As we’ve talked about quite a bit in recent weeks, cheap oil, at this point in the global economic recovery, is a catalyst to destabilize the global economy………………………………………..Full Article: Source

Here’s Why Oil Could Be Headed to $0

Posted on 25 February 2016 by VRS  |  Email |Print

You don’t need to be an economist to know that the oil market is bonkers these days. The price of oil has fallen roughly 70% over the past 18 months to a recent $32 a barrel, with many analysts believing the all-important commodity has further to fall. But could oil prices fall all the way to zero? Yup, at least according to one analysis.
Economists at the Federal Reserve Bank of St. Louis recently took a look at the interplay between inflation expectations and oil prices, and built a model around that. What they found is that if the market’s current inflation expectations are correct, then oil prices are likely to fall all the way to $0 per barrel by mid-2019……………………………………….Full Article: Source

Oil price: ‘we can live with $20 a barrel,’ says Saudi Arabia

Posted on 25 February 2016 by VRS  |  Email |Print

There will be no short-term resolution to the current oil glut in the form of coordinated production cuts, Saudi Arabia’s oil minister has warned. In comments at an industry conference in Houston that sent the oil price spiralling lower, Ali al-Naimi stated categorically that a cut in supplies “is not going to happen”, reports the Financial Times.
International benchmark Brent crude fell from above $34.50 yesterday afternoon to below $33 this morning on the news. The market had hoped this month’s tentative deal to freeze output - struck between Saudi Arabia and Russia, among others - would eventually lead to a more definitive tightening of the spigot………………………………………..Full Article: Source

Why shale could help to rebalance oil market

Posted on 25 February 2016 by VRS  |  Email |Print

Shale oil could help rebalance global commodity prices as the sector looks to shrug off a tough couple of years, the chief executive of one the industry’s leading services companies has told CNBC.
“The market will come back but the big challenge we all have is knowing when that will happen,” Keith Cochrane, the chief executive of Weir Group, an engineering company based in Scotland that supplies services to the oil and gas industry, told CNBC on Wednesday. “The days of $100 a barrel oil have gone for a long, long time but it’s back to the simple maths around supply and demand,” Cochrane added………………………………………..Full Article: Source

OPEC veteran Attiyah urges output cut, frets about glut

Posted on 25 February 2016 by VRS  |  Email |Print

OPEC and non-OPEC producers should cut production to balance the global oil market before a supply glut becomes unmanageable “like a cancer”, Qatar’s former oil minister Abdullah al-Attiyah said.
Attiyah, influential in OPEC as Qatar’s energy minister from 1992 to 2011, said a deal announced in Doha last week by Saudi Arabia and Russia to freeze production at January levels was not enough to balance the market as an oversupply continues to grow………………………………………..Full Article: Source

BNP Paribas Sticks To Sub-$1000 Gold Forecast For 2016, Despite 17% Rally

Posted on 25 February 2016 by VRS  |  Email |Print

Although some banks have shifted their outlook on gold, as global market uncertainty propelled prices up more than 17.5% on the year, one bank remains firm that prices will move lower. Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, said that the bank is in no hurry to change its forecast and there is still a possibility for gold to drop below $1,000 an ounce.
In January, the firm said that it expects gold prices to average $980 an ounce this year and $860 in 2017; and, Tchilinguirian said that fundamentally nothing has changed. In fact, the latest rally has made selling out of the money call options — the bank’s preferred way to take advantage of a weaker gold market — a lot more compelling, he added………………………………………..Full Article: Source

Is Gold Still a Good Investment Today?

Posted on 25 February 2016 by VRS  |  Email |Print

In the last few months, China’s economy has been faltering, and it has been having an effect on world financial markets. Due to this recent development, gold prices have shot up compared to what it used to be before.
During the period of the introduction of the Gold Reserve Act back in 1934, the price of gold was set to be $35 an ounce. That is a record increase of more than 300% between then and now. Actually, gold is a volatile investment. When it comes to gold, prices can go down as well as up, and over the last few years they have done both. At the height of the recession, way back in 2011 for instance, gold hit a record high of $2,000 per ounce. But by the end of 2014, the price of gold had fallen to $1,200 per ounce………………………………………..Full Article: Source

Central Banks Could Send Gold Bullion Soaring

Posted on 25 February 2016 by VRS  |  Email |Print

If you are looking to get direction on where gold bullion prices are headed, then look at the central banks around the world. They are becoming a major player in the gold market.
Simply put, central banks are buying gold bullion. This phenomenon shouldn’t go unnoticed whatsoever. Central banks could send gold bullion prices much higher. Consider this; in 2015, central banks purchased 588.4 tonnes of gold bullion. In 2014, they purchased 583.9 tonnes of the yellow precious metal. Mind you, they have been buying for a very long time………………………………………..Full Article: Source

Gold jumps above $1,250/oz as investors seek refuge

Posted on 25 February 2016 by VRS  |  Email |Print

Gold rose above $1,250 an ounce and neared a one-year high on Wednesday, acting as counter against risk alongside top-rated government bonds as oil’s earlier weakness rippled into global equity markets.
“Gold is rising on the back of weak risk appetite, but what stands out today is that the market is rising even though the dollar is higher as well,” Jens Pedersen, senior analyst at Danske Bank, said when the greenback was firm………………………………………..Full Article: Source

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