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Commodities Briefing - Archive | April, 2016

Chinese Commodity Speculators Drop Out After $261 Billion Binge

Posted on 29 April 2016 by VRS  |  Email |Print

The speculators that traded $261 billion in Chinese commodities in a single day last week are retreating as regulators prepare to step up control of the market.
The value of futures traded across China’s three biggest commodity exchanges has shrunk 42 percent since investors spent 1.7 trillion yuan last Thursday on everything from steel bars to eggs. The amount that changed hands was on a par with the entire U.S. equities market on the same day………………………………………..Full Article: Source

China securities regulator orders major commodities exchanges to control futures speculation

Posted on 29 April 2016 by VRS  |  Email |Print

China’s securities regulator ordered the country’s major commodity futures exchanges this week to control speculative trading activity, sources told Reuters, after a surge in prices sparked fears of a boom-and-bust cycle.
In response, commodity futures exchanges in Dalian, Shanghai and Zhengzhou ordered major institutional investors that lack a commodities background to rein in their trading, three people with direct knowledge of the situation said. The sources didn’t define what was meant by a lack of background in commodities………………………………………..Full Article: Source

How to avoid the commodities curse

Posted on 29 April 2016 by VRS  |  Email |Print

Papua New Guinea lays out the challenges in stark and basic terms following slump in prices. If you want evidence of the “commodities curse”, look no further than Port Moresby, the raggle-taggle capital of Papua New Guinea.
Of course, the curse is not Papua New Guinea’s problem alone – the global collapse in prices of so many key commodities is creating wrenching challenges in economies ranging from Venezuela, Peru and Brazil to Mozambique, Indonesia and Russia – but Papua New Guinea lays out the challenges in stark and basic terms………………………………………..Full Article: Source

Opec bid to throw US out of oil market seems to have backfired

Posted on 29 April 2016 by VRS  |  Email |Print

Crude oil prices continued to trend higher for the second consecutive fortnight in a row, as Brent rose more than 7.5 per cent while WTI gained 10.10 per cent over the same period.
On MCX, oil prices have risen by around 11.85 per cent in the same time frame. The rally in oil prices is triggered by a combination of factors such as increased optimism that prices may have bottomed out and also increased speculative behaviour by fund managers………………………………………..Full Article: Source

Oil market to face lack of supply in 3 years: Total CEO

Posted on 29 April 2016 by VRS  |  Email |Print

The global oil market will face a lack of supply in three years’ time due to expenditure cuts and postponements in mega projects, Patrick Pouyanne, chairman of the Board and CEO of French oil giant Total said.
Speaking at 2016 Columbia Global Energy Summit, Pouyanne talked about the difficulties that oil companies are facing under low oil prices. “Fifteen days after I became the CEO of Total, oil prices collapsed … and we lost $10 billion in cash flows in two months,” he said. “Due to the huge drop in oil prices, most of the players had to squeeze their cash flows and investments,” he added………………………………………..Full Article: Source

Oil’s Rise Chugs On

Posted on 29 April 2016 by VRS  |  Email |Print

Crude prices increase as many traders become more confident that oversupply will wane. Oil’s rally chugged ahead on Thursday, with the U.S. benchmark closing above $46 a barrel for the first time since November, again thwarting analysts who have repeatedly called for a retreat.
Global supply remains strong and U.S. stockpiles are increasing, but many traders are convinced the oversupplied market is on its way to balancing, brokers said. Their hopes are buoyed by steadily declining U.S. production and intermittent supply disruptions around the globe. And they got an extra boost Thursday from currency markets that lifted several commodity prices………………………………………..Full Article: Source

Rising oil prices throw lifeline to shale producers: Kemp

Posted on 29 April 2016 by VRS  |  Email |Print

Brent prices for 2017 ended trading above $50 per barrel on Wednesday for the first time since mid-December following the largest and most sustained rally in prices since the oil slump started.
The average for the 12 futures contracts expiring in 2017, called the calendar strip, has risen by 34 percent from its recent low of $37.45 on Jan. 20 to $50.26 on April 27.Spot prices, represented by the nearest futures contract, dominate the headlines and are of most interest to analysts and financial investors………………………………………..Full Article: Source

Did OPEC Just Start Preparing for the End of the Oil Era?

Posted on 29 April 2016 by VRS  |  Email |Print

Sunday, April 17, was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices.
Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels………………………………………..Full Article: Source

Analysts Just Aren’t Buying the Oil Rally

Posted on 29 April 2016 by VRS  |  Email |Print

Questions remain about current high oil stockpiles and the potential for increased supply. Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude’s recent gains might not be sustainable.
The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market………………………………………..Full Article: Source

Gold to leave three-year rout behind as Fed rate expectations fade: poll

Posted on 29 April 2016 by VRS  |  Email |Print

After three straight years of losses, analysts are finally prepared to say gold prices have found a bottom, with rising prices seen this year and next as concerns over the pace of U.S. monetary policy tightening fade.
Gold analysts polled by Reuters have hiked their forecasts for the precious metal by nearly $100 an ounce since the start of the year after it posted its biggest quarterly rise in nearly 30 years in the three months to March………………………………………..Full Article: Source

Who are gold traders?

Posted on 29 April 2016 by VRS  |  Email |Print

The Commitments of Traders Report is one of the most important publications on the gold market. It is usually published every Friday at 15:30 Eastern time by the Commodity Futures Trading Commission (CFTC) to provide market participants “a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.”
Unfortunately the readers don’t get a full picture because of a three day lag between a report and the actual positioning of traders (though the report is issued on Friday, it contains Tuesday’s data). The open interest, analyzed in the report, is the total number of futures contracts not yet liquidated by an offsetting transaction or fulfilled by delivery………………………………………..Full Article: Source

Believe it or Not – It’s Way Too Early to Take Profits in Gold and Silver

Posted on 29 April 2016 by VRS  |  Email |Print

It was no fun investing in precious metals for most of 2011-2015, but the past few months have sure been a blast for buy-and-hold investors. Silver prices are up 22.5% year to date, and gold isn’t far behind. Now that there are some profits available to take, some gold and silver investors wonder if they should grab them. The answer for most people is not yet — not even close.
Yes, there are gains. But the real question for gold and silver investors isn’t whether or not there are profits, it’s whether there are better options for their investment dollars. What other assets have a better risk/reward profile? Cash? Stocks? Bonds? No thank you!……………………………………….Full Article: Source

Metal prices

Posted on 29 April 2016 by VRS  |  Email |Print

The Economist’s metals index has fallen by 46% from its peak in 2011, largely because of slowing demand in China. Supply disruptions caused occasional spikes: nickel prices rose in the first half of 2014 after Indonesia banned metal-ore exports and zinc prices jumped in 2015 after mine closures.
Metals prices have rallied in the past few months, however, thanks to a weaker dollar and a credit surge in China. The price of iron ore, a steel-making ingredient, has jumped by 70% since December. The value of tin has increased because Indonesia, the world’s second-biggest producer, introduced regulations to halt illegal trade that also curbed exports; recent flooding has also restricted access to mining areas………………………………………..Full Article: Source

Iron Ore Bear Holds Fast Even After `the Market Got It So Wrong’

Posted on 29 April 2016 by VRS  |  Email |Print

Iron ore’s surprise rally may be a thing of the past in just three months. Rising supply will top demand once more and the sudden jump in speculative trading in China that’s helped support gains is set to fizzle out, according to Brazil’s Itau Unibanco Holding SA.
The commodity will probably soon be back below $50 a metric ton, and may end the year at about $42, Artur Manoel Passos, an economist in Sao Paulo at Latin America’s largest bank by market value, said in an interview. Last week, iron ore traded as high as $70.46………………………………………..Full Article: Source

How Shanghai trading is changing the physical nickel market

Posted on 29 April 2016 by VRS  |  Email |Print

Everyone’s talking about Chinese speculators. This year has seen an unprecedented surge of trading volumes and open interest in Chinese markets as institutional and retail investors pour money into commodities.
Both the Shanghai Futures Exchange (ShFE) and the Dalian Exchange are upping margin requirements and transaction fees to try and calm overheating contracts such as steel rebar and iron ore. The stampede appears to have been halted with both prices and trading activity losing some of their recent froth. But the current trading frenzy shouldn’t distract from the growing global influence of China’s domestic commodity exchanges………………………………………..Full Article: Source

ETF Industry Assets Grow in Q1 2016

Posted on 29 April 2016 by VRS  |  Email |Print

ETF growth across the industry in Q1 was fueled by the retail space, climbing to $2.3 trillion overall. More specifically, during Q1 2016, ETF assets climbed by 2.4% QoQ to $2.3 trillion, which was fueled in part by retail channels, as calculated by its Fund Distribution Intelligence.
However, this performance was mitigated by an overall net decline of new assets (-0.68%), which corresponded to a decrease of $15.0 billion. In terms of the retail space, ETFs in this realm also saw increases in assets, namely across fixed income, alternative and commodity products, though equity, convertibles and allocation product assets were all down QoQ………………………………………..Full Article: Source

Water ETFs to Invest in 2016 - Best ETFs for Full Exposure to Water

Posted on 29 April 2016 by VRS  |  Email |Print

With the droughts on the West Coast, and led crisis expanding from Flint to the rest of the East Coast, investing in water companies sounds like a no brainer. To further back the opportunity, the genius from the movie “The Big Short” also has explained why water is the commodity to buy.
Especially if you have passed your Financial Assessment test and are eligible to expand your investing portfolio. With that I finally sat down and wrote about the best water ETFs to invest in 2016, which we have been advising to some Invest Diva students. You don’t have to search no more!……………………………………….Full Article: Source

Commodity hedge funds outshine other hedge funds

Posted on 29 April 2016 by VRS  |  Email |Print

The commodities market has a very positive sentiment now and the commodity hedge funds are doing better than other hedge funds. Commodities hedge funds have given negative returns for the past three years.
But according to Peter Laurelli, vice-president, research, eVestment, the current year has started on a positve note for commodities as investors start reallocating for better gains. The commodities market has a very positive sentiment now and the commodity hedge funds are doing better than other hedge funds………………………………………..Full Article: Source

Maybe Currency Flash Crashes Don’t Matter

Posted on 29 April 2016 by VRS  |  Email |Print

The world’s biggest financial market may be destined for a flash-crash future.This sounds scary because the foreign-exchange market is crucial, determining the real-time worth of every nation’s currency. But violent moves there may not matter as much as they do in other markets, such as those for equities.
Rachel Evans of Bloomberg News wrote an article on Thursday highlighting how the $5 trillion-a-day currency market is undergoing a significant transformation. Trading has been slowing, perhaps because of a lack of investor conviction in the face of central bank intervention………………………………………..Full Article: Source

The currency correlations that matter

Posted on 29 April 2016 by VRS  |  Email |Print

Yen’s surge contributes to tremors across asset classes from commodities to S&P futures. This week provided further evidence of how sharp currency moves can have an impact on the broader market.
The Japanese yen’s surge early on Thursday whacked the exporter-sensitive Nikkei 225. Because the USD/JPY is seen by many a proxy of global risk appetite, the exchange rate’s plunge contributed to tremors across asset classes from commodities to S&P futures………………………………………..Full Article: Source

The Real Currency War

Posted on 29 April 2016 by VRS  |  Email |Print

Disagreement came to the global financial system when the control over reserve currency became a matter of privilege rather than responsibility. That struggle has since become a morass of monetary expansion and conflict as states have pursued their own, often incompatible currency goals.
The battle of the currencies has left widespread financial instability in its wake, weakening the state-centric currency model that ruled the monetary order for the past century. Now, a different type of money — digital currency — is making a play to become the new standard. If successful, the politics of money could radically change, and with it, the power of states themselves………………………………………..Full Article: Source

EU High Court Rules Against Businesses on Carbon Credits

Posted on 29 April 2016 by VRS  |  Email |Print

European Court of Justice rules EU gave out too may allowances when it expanded the emissions program in 2013. The European Union’s highest court on Thursday ordered the European Commission to adjust its emissions-trading program in a way that could raise costs for some of the bloc’s biggest companies.
The European Court of Justice ruling reinforced the EU’s efforts to more aggressively cap carbon-dioxide emissions in the years to come, following a landmark agreement in Paris last year among world leaders to address climate change………………………………………..Full Article: Source

Cap-and-trade best way for Canada to reduce emissions

Posted on 29 April 2016 by VRS  |  Email |Print

Rather than a patchwork of provincial policies, a Canada-wide system would send a stronger signal that a low-carbon future is upon us. Over the last decade, in the absence of federal leadership, Canadian provinces have gone their own way on carbon pricing.
Alberta chose a unique carbon pricing system, British Columbia implemented a carbon tax, and Quebec launched a cap-and-trade system which Ontario will soon join. Others are waiting in the wings, either weighing their options or vehemently opposed. As a result, Canada’s environmental standing fell and full economic potential went untapped………………………………………..Full Article: Source

For commodities markets, the bad times are just beginning

Posted on 28 April 2016 by VRS  |  Email |Print

For the commodities market, the good times have come and gone, but the bad times are only just beginning. Each commodities supercycle, defined as a decadelong bull market, has always been followed by a downturn that lasted just as long, or longer.
With demand weak and oversupply rampant, it is unlikely that this time will be any different. For many countries and companies, this means the only options are adapt or die………………………………………..Full Article: Source

Iron ore, steel lead China commodities retreat as curbs bite

Posted on 28 April 2016 by VRS  |  Email |Print

A major Chinese commodities exchange took further steps to calm volatile markets on Wednesday, hiking transaction fees and widening trade limits in a move that could make exiting futures contracts more orderly.
Iron ore and steel futures fell again in reaction to higher trading costs, brought in to deter speculative investors believed to be behind last week’s spike in prices and volumes that had stoked fears of a destabilizing crash. The Dalian Commodity Exchange said it would double the transaction fees on steelmaking raw materials coking coal and coke futures from Thursday, the fourth increase in a week………………………………………..Full Article: Source

Speculators march into China commodities

Posted on 28 April 2016 by VRS  |  Email |Print

At the start of the year western commodity traders knew China, the world’s biggest consumer of raw materials, would play a decisive role in the direction of markets. What they did not know was that it would be Chinese investors as much the country’s economic prospects driving prices.
In the past month near mania has gripped China’s commodity futures markets with day traders and yield-hungry wealth managers pouring into a lightly regulated sector, often with astonishing results………………………………………..Full Article: Source

Saudi Arabia will struggle to kick its addiction to oil: Kemp

Posted on 28 April 2016 by VRS  |  Email |Print

“King Abdulaziz and the men who worked with him for the establishment of the state did not depend on oil and they established the kingdom without oil, and they ran this state without oil, and they lived in this state without oil,” Saudi Deputy Crown Prince Mohammed bin Salman said in an televised interview on Monday.
The deputy crown prince criticised the kingdom’s subsequent “addiction” to oil which has “disrupted the development of many sectors in the past years” implying this was a relatively recent problem………………………………………..Full Article: Source

World Bank optimistic on oil averaging at $41 this year

Posted on 28 April 2016 by VRS  |  Email |Print

World Bank boosted its forecast for oil prices this year, projecting that refinery demand will pick up and United States production cuts will steepen in the second half of 2016.
Crude prices will average $41 per barrel this year, which is still down 19 per cent from 2015, the Washington-based development bank said on Tuesday in its quarterly commodity-markets outlook. The bank in January had predicted a price of $37 per barrel, which represents a composite of projections for the Brent, West Texas Intermediate and Dubai Fateh blends………………………………………..Full Article: Source

Oil tops $45 a barrel for first time since November

Posted on 28 April 2016 by VRS  |  Email |Print

Oil climbed above $45 a barrel in New York today for the first time since November after U.S. industry data showed a decline in crude stockpiles. West Texas Intermediate futures rose as much as 2.6 percent, extending a 3.3 percent gain Tuesday.
Supplies fell by 1.07 million barrels last week, the industry-funded American Petroleum Institute was said to report. The World Bank boosted its forecast for oil prices this year, projecting that demand will pick up and U.S. output cuts will steepen in the second half of 2016………………………………………..Full Article: Source

Low demand in Asia may pull down gold price

Posted on 28 April 2016 by VRS  |  Email |Print

Gold prices that hit a 13-month high in March are likely to fall back in the short term because of a slump in demand from key Asian consumers, GFMS analysts said in a report on Tuesday.
Global gold demand tumbled by 24 per cent year-on-year to 781 tonnes in the first three months of the year, its weakest quarter in seven years, as buying from leading consumers India and China plummeted, GFMS said in the first-quarter update to its Gold Survey 2016………………………………………..Full Article: Source

Why China Wants Yuan-Denominated Gold

Posted on 28 April 2016 by VRS  |  Email |Print

It’s crucial to understand the potential benefits for China of having yuan-denominated gold. Besides internationalization, the fix may also increase the liquidity and efficiency of the gold markets. Yuan-denominated gold may also reduce the dependency of gold on the US dollar, though this may not hold true in the short run. In the longer run, gold may untangle from the US dollar.
According to the World Gold Council, in 2015, China’s gold demand hit 984.5 tons. The initiation of the yuan benchmark for gold is aimed at increasing the usage of the yuan as a global currency………………………………………..Full Article: Source

Silver price jumps to near one-year high

Posted on 28 April 2016 by VRS  |  Email |Print

On Wednesday, silver jumped to the highest since mid-May last year, as the metal continues to be rerated against the gold price and industrial metals demand gets a boost.
Silver futures in New York for delivery in May, the most active contract, added nearly 2% in early dealings to trade at $17.48 an ounce, before paring some of those gains by the close………………………………………..Full Article: Source

Silver bullion momentum building as supply trouble brewing

Posted on 28 April 2016 by VRS  |  Email |Print

Silver bullion prices are likely to rise further as there is “supply trouble brewing” as strong industrial and investment demand are confronted by declining supply.
“There are signs that this year could be a pivotal year for the silver market,” New York-based CPM Group said in its “Silver Yearbook 2016… Silver mine supply is forecast to decline for the first time in 2016, since 2011,” CPM said, noting scheduled closures and planned production cutbacks………………………………………..Full Article: Source

Copper hits lowest in a week on China speculator crackdown

Posted on 28 April 2016 by VRS  |  Email |Print

Copper dipped to the lowest in a week on its third straight day of losses as a crackdown on speculators in China dampened sentiment, though metals markets were supported by a weaker dollar and strong oil prices.
Iron ore and steel futures in China led a retreat as the authorities raised trading costs to deter speculative investors believed to be behind last week’s big spike in prices and volumes that raised fears of a destabilising crash………………………………………..Full Article: Source

Nasdaq mulls new exchange to ease trading in illiquid ETFs - CEO

Posted on 28 April 2016 by VRS  |  Email |Print

The acquisition of U.S. options exchange operator ISE from Deutsche Boerse AG was approved by the U.S. Department of Justice last week, Robert Greifeld, Nasdaq’s chief executive officer, said on a call with analysts.
The deal still needs approval from the U.S. Securities and Exchange Commission, but could close as early as the end of the quarter, versus earlier guidance of the second half of the year, he said on the call following the announcement of Nasdaq’s first-quarter earnings, which topped expectations………………………………………..Full Article: Source

Aluminium looks vulnerable to pullback, iron ore less so: Russell

Posted on 28 April 2016 by VRS  |  Email |Print

If there is a common theme emerging from the recent strong gains in commodity prices, it’s that the extent of the rally isn’t justified by fundamentals and is therefore largely speculative.
Assuming this market consensus is correct, it’s logical to assume that at some point the heat will go out of the market and prices will stabilise or retreat. It would also be logical to assume that the gains in some commodities have been more justifiable than those for others, given the differences in supply and demand dynamics………………………………………..Full Article: Source

Oil ETFs Are Battling Bearish Energy Earnings

Posted on 28 April 2016 by VRS  |  Email |Print

Oil sector exchange traded funds are facing some hurdles as major energy producers ready their first quarter results. With overwhelmingly weak expectations after crude prices plunged to near 13-year lows in February, the sector ETFs could surprise if oil producers reveal conditions weren’t as bad as previously expected.
Energy traders will be watching for the ConocoPhillips’ (COP) first quarter earnings announcement on Thursday, April 28, followed by Exxon Mobil (XOM) and Chevron (CVX) on Friday, April 29………………………………………..Full Article: Source

Speculative Bubble in China Commodity Futures Rattles Industry Players

Posted on 28 April 2016 by VRS  |  Email |Print

A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors.
A herd of financial investors charged into commodities futures markets this year, throwing money into iron ore, rebar, cotton, and even egg futures, causing rapid spikes and leading many to warn of similarities with last year’s boom and bust in Chinese stocks………………………………………..Full Article: Source

Sweden Declares Truce in Currency War

Posted on 28 April 2016 by VRS  |  Email |Print

Sweden’s central bank is calling a truce in the currency war. As policy makers in Stockholm last week announced they would reduce the pace of their quantitative easing program in the second half of this year, they also signaled they are now willing to accept a stronger krona.
And traders took them at their word. The trade-weighted KIX index this week broke through a level that just as recently as December triggered warnings of a currency intervention………………………………………..Full Article: Source

Investors Put Their Chips on the Yen

Posted on 28 April 2016 by VRS  |  Email |Print

As Japan’s central bank again ponders steps to rouse the country’s sluggish economy, an array of market forces is betting against it. Asset managers are trimming bets the yen will weaken against the U.S. dollar and increasingly betting it will strengthen instead.
That has supported a steady increase in yen buying that is the opposite of what the Bank of Japan had expected to happen through its monetary easing. Speculative buyers, including some hedge funds, have also been piling on bets since early this year that the yen would appreciate………………………………………..Full Article: Source

EUA rally crosses €7 mark, prices up 23% in past week

Posted on 28 April 2016 by VRS  |  Email |Print

European carbon prices continued to climb on Tuesday after the previous day’s stellar rise, notching a 3.3% gain on the back of a bullish energy complex and after EUAs hit their highest since mid-January.
The front-year futures trading on ICE settled up 22 cents at €6.84 having retreated from the intraday peak of €7.07 touched several times in morning trade. Prices are now up 23% in the last week and 43% over the past month………………………………………..Full Article: Source

Carbon copy: Are we in for another scare campaign over climate change?

Posted on 28 April 2016 by VRS  |  Email |Print

While groups such as The Climate Institute and the Greens will question whether targets for emissions cuts – close to double the Coalition’s by 2030 – go far enough, Shorten is sending a clear signal he’s willing to make climate a centrepiece of the 2016 election campaign.
Labor’s strategy, including an emissions trading scheme, has its risks. The success of Tony Abbott’s scare campaign against the carbon tax prompted then environment spokesman Greg Hunt to predict the 2013 election would be the last in a generation to feature climate change prominently………………………………………..Full Article: Source

UK’s ECCC backs fifth carbon budget proposal to cut emissions by 57% from 1990

Posted on 28 April 2016 by VRS  |  Email |Print

A House of Commons select committee backed the UK’s proposal to set the fifth carbon budget at 1,765 million metric tons of carbon dioxide equivalent (MtCO2e), which would cut emissions to an average 57% below 1990 baseline levels.
In a report on Wednesday, the Energy and Climate Change Committee (ECCC) said the Committee on Climate Change (CCC), an independent body established under the UK’s 2008 Climate Change Act, had produced robust advice in line with previous budgets and with the overall trajectory towards meeting the 2050 target………………………………………..Full Article: Source

China acts to cool frenzied speculation in commodities

Posted on 27 April 2016 by VRS  |  Email |Print

China has moved to clamp down on excessive speculation in commodities after weeks of frenzied trading boosted prices and ignited fears of another bubble in its domestic markets.
Iron ore and steel futures in China fell back again yesterday after the authorities raised transaction costs to cool rapid gains that had raised concerns that an unstable speculative bubble was forming. However, other commodity futures, including coking coal, kept surging………………………………………..Full Article: Source

Commodity hedge funds are hot again

Posted on 27 April 2016 by VRS  |  Email |Print

Commodity hedge funds netted more investor cash in the first quarter than any other type of hedge fund, and their $4 billion of inflows was their largest for any quarter in more than six years. The group has brought in more money that it has had to redeem for seven straight months, the longest winning streak ever tracked by eVestment.
The quarter has brought a turning point for commodity markets. Oil and gold have had their sharpest rallies in years amid broad gains in the sector. They boosted commodity hedge funds to returns of 1.6% in the quarter, besting all peers except currency and financial derivatives traders, eVestment said………………………………………..Full Article: Source

World Bank sees US$41 oil this year, but cuts outlook for other commodities

Posted on 27 April 2016 by VRS  |  Email |Print

The World Bank is raising its 2016 forecast for crude oil prices to US$41 per barrel, up from the US$37 per barrel forecast at the start of this year, in view of “improving market sentiment and a weakening dollar”.
This forecast of firming energy prices, made in the World Bank’s latest edition of its Commodity Markets Outlook, is thus positive for producing countries in Asia and elsewhere, and also for central banks struggling to reverse persistent deflationary trends in their economies. The bank’s outlook for other commodities, however, is less bright………………………………………..Full Article: Source

Saudi reforms could be low oil price’s cure

Posted on 27 April 2016 by VRS  |  Email |Print

A major obstacle holding back economic reform in Saudi Arabia has been removed. And with it goes one of the main barriers to a rising oil price. Saudi’s cabinet approved an economic reform plan on April 25 aimed at ending the country’s addiction to crude.
The plan’s author, Deputy Crown Prince Mohammed bin Salman, could plausibly argue that after the price of oil had fallen 60 percent in two years, it was time to radically overhaul the economy and open up new sources of non-oil income. Now that his strategy has won official backing, the 31-year-old prince has a chance to get the best of both worlds by moving ahead with reforms while letting oil prices - which Saudi effectively drives as the swing producer - climb at the same time………………………………………..Full Article: Source

Oil hits 2016 high after U.S. crude draw report, gasoline rally

Posted on 27 April 2016 by VRS  |  Email |Print

Crude oil prices hit 2016 highs on Tuesday on the back of a rally in the gasoline market and after an industry group reported a surprise draw in U.S. crude stockpiles. Brent and U.S. crude’s West Texas Intermediate (WTI) futures finished regular trading about 3 percent higher, riding on the coattails of a gasoline rally that hit August highs after a series of refinery hikes.
In post-settlement trade, both benchmarks rose more than 4 percent after the American Petroleum Institute reported a drawdown of nearly 1.1 million barrels in U.S. crude inventories last week versus a 2.4 million-barrel build expected by analysts in a Reuters poll………………………………………..Full Article: Source

Venezuela formally proposes non-OPEC producers attend Vienna meeting

Posted on 27 April 2016 by VRS  |  Email |Print

Venezuela has proposed that non-OPEC oil producers attend the group’s June meeting in Vienna to continue “dialogue and coordination,” according to a letter sent by the South American country’s oil minister to the Qatari energy minister, who is also the current OPEC president.
“We’ve formally proposed to continue Doha discussions in Vienna,” Venezuelan Oil Minister Eulogio Del Pino told Reuters on Tuesday………………………………………..Full Article: Source

Gold price could hit $1,300/oz on weaker dollar, global risks – HSBC

Posted on 27 April 2016 by VRS  |  Email |Print

The gold price has the potential to hit $1,300 this year thanks to gold-bullish factors including a weaker dollar, global risks and a modest recovery in oil prices, HSBC said. A move above $1,300 would take the yellow metal to the strongest since January 2015. Spot gold was last at $1,233.30/1,233.60 per ounce, down $3.70 on Tuesday’s close.
“We find two reasons that reaffirm our broadly bullish view on gold. The potential for US dollar weakness ahead, particularly vs the euro, helped by a truce in the currency wars. Gold could also benefit from hedging ahead of the UK referendum on remaining in the EU,” the bank said in a note………………………………………..Full Article: Source

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