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Commodities Briefing - Archive | July, 2016

World Bank sees upward commodity trend

Posted on 29 July 2016 by VRS  |  Email |Print

The World Bank has revised upwards its forecast for many commodity prices in the second half of 2016. Some, it says, might end the year with a lower average price than in 2015 but on the whole, prices have already seen a bottom. It has a positive outlook for energy, non-energy, crude oil and gold; that for fertiliser and metal & minerals is still negative.
Its Commodity Markets outlook for July, a quarterly publication, shows most commodity price indices rebounded in the year’s second quarter (Q2) from January lows, on improved market sentiment and tapering supply………………………………………..Full Article: Source

Mind the gap between oil prices and commodity-sector bonds

Posted on 29 July 2016 by VRS  |  Email |Print

A recent divergence between commodity prices and spreads for bonds of companies in the commodity sector is flashing “mind-the-gap” warnings for the market. After a strong advance earlier in the year, oil prices recently plunged to a three-month low, pulling down the shares of energy companies and even weighing on the broader equity benchmarks.
But bonds of companies in energy, metals, mining and steel seem unaffected by oil’s decline — a trend that baffles analysts and suggests that bonds might actually be mispriced………………………………………..Full Article: Source

Goldman Sachs says oil market fundamentals ‘fragile,’ oil prices to stay flat until mid-2017

Posted on 29 July 2016 by VRS  |  Email |Print

Crude oil prices will remain in the $45-$50-a-barrel range till mid-2017, with little to change the global supply and demand situation, Goldman Sachs said. The investment bank’s analysts ran through the many scenarios that would keep the oil market in stasis.
“The improvement in oil fundamentals remains fragile and continues to feature large offsetting forces: wildfires have helped offset surprisingly strong Iran production, slowing demand growth in India and China in 2H16 will help offset production issues in Nigeria and Venezuela and finally product builds have offset crude draws,” they said………………………………………..Full Article: Source

US oil in bear market territory: 5 things to watch

Posted on 29 July 2016 by VRS  |  Email |Print

Crude oil’s quiet slide from its 2016 high sharpens questions about the outlook. The major US crude oil benchmark has fallen into a bear market, heaping more pressure on oil companies and major producing countries that had hoped the worst of the rout was over.
West Texas Intermediate, the main US crude benchmark, fell to $41.14 on late Thursday afternoon, down 20.4 per cent from its intraday peak of $51.67 per barrel on June 9. A 20 per cent decline is the technical definition of a bear market………………………………………..Full Article: Source

Oil-Price Rout Casts Shadow Over Earnings in Energy Sector

Posted on 29 July 2016 by VRS  |  Email |Print

After two years of spending cuts, canceled projects and tens of thousands of layoffs, Europe’s biggest energy companies are still struggling to cope with a prolonged oil-price rout.
Royal Dutch Shell PLC Thursday reported a 93% drop in profit and rocketing debt for its most recent quarter, sending shares down sharply. Smaller peers such as France’s Total SA and Spain’s Repsol SA also booked lower profits Thursday, while rivals BP PLC and Statoil ASA announced similarly grim results earlier in the week………………………………………..Full Article: Source

Non-Opec oil output decline rates speed up

Posted on 29 July 2016 by VRS  |  Email |Print

Non-Opec oil field decline rates have accelerated to 5 per cent as a result of the impact on output from a 41 per cent or $285 billion reduction in global oil & gas capex from the 2014 peak, a Bank of America Merrill Lynch (BofAML) report said.
This figure is higher than the 4.87 per cent recorded in 2009, and it is also slightly higher than previous estimates for this year of 4.9 per cent, explained the report titled, “Global Energy Weekly: Oil decline rates speed up” authored by the Global Commodities team at BofAML………………………………………..Full Article: Source

Coal’s Lead in Commodity Rally Seen Overdone as Demand Falls

Posted on 29 July 2016 by VRS  |  Email |Print

Investors in European coal, the year’s best-performing commodity, should strap in for a bumpy ride as demand for the fuel wanes.
Coal for delivery in Europe in 2017 will fall about 11 percent by December, taking the gloss off the longest rally in year-ahead prices since 2010, according to a survey of traders and analysts by Bloomberg. The mineral’s 48 percent jump this year is more than double crude oil’s advance………………………………………..Full Article: Source

Trump And Other Reasons This Gold Bull Market Has Room To Run Higher

Posted on 29 July 2016 by VRS  |  Email |Print

Looking more Las Vegas casino than Oval Office, the stage on which Donald Trump delivered his nomination acceptance speech last week was all gold, from the stairs to the podium, completely befitting of his showman-like style.
Whether you support or oppose Trump, it’s time to face reality. This is really happening, and we should all brace ourselves for what will surely be one of America’s messiest, ugliest general election seasons………………………………………..Full Article: Source

How Donald Trump Changed My Mind About Gold

Posted on 29 July 2016 by VRS  |  Email |Print

If you poke around on the internet, you’ll find a lot of people who have criticized me for being a “gold hater.” Here are two different pieces that took me just a few seconds to find. There are plenty of tweets out there saying the same thing.
These people have been basically right. Over the years, I’ve said a lot of bad stuff about gold — how it’s a lousy currency, how it’s just a rock that shouldn’t have any value, how love of it is primitive and irrational, how it has no justifiable basis in the economy. But I’m changing my mind, and it’s all due to Donald Trump………………………………………..Full Article: Source

Platinum, palladium chase down gold’s stellar showing

Posted on 29 July 2016 by VRS  |  Email |Print

The lesser known precious metals have had a stellar month, catching up with gold. Platinum has eclipsed gold’s performance this year and palladium is close to doing so, after demand from the car industry and investor appetite sent the two precious metals on a blistering rally this month.
Palladium is set for its best monthly performance in over eight years, leaving it just shy of the 26 per cent rise in gold this year. Platinum and palladium, which are used in auto catalysts, are trading at their highest levels in more than a year………………………………………..Full Article: Source

Platinum takes limelight from gold with best month in four years

Posted on 29 July 2016 by VRS  |  Email |Print

A surprise rally in gold and silver caught the eyes of investors in the first half of the year. Now, platinum and palladium are shining brighter. Platinum is up 12% in July, putting prices on track for the best month since 2012. Palladium is even better, jumping 17%, the most since 2008. By comparison, gold added less than 2% in July as it lost momentum after gains in the first half.
The two lesser-known precious metals, used in devices that control toxic car emissions, are benefiting from better auto sales in China, concern over labour in South Africa and loose monetary policy from central banks around the world………………………………………..Full Article: Source

Does Citigroup See Brightness in the Gold Market?

Posted on 29 July 2016 by VRS  |  Email |Print

Further to its outlook on gold, Citibank is analyzing potential rate hikes by the Federal Reserve over a period of time to get clues on gold’s direction. The fluctuations in the US dollar are also being considered in the bank’s study of gold prices.
In the bank’s research report, it has listed three possible scenarios: In its “base-case” scenario, the bank points out a 65% chance that gold’s price will be $1,325 per ounce in 3Q16 and $1,280 in 4Q16. It has considered only one rate hike before the year’s end. The weakness of the dollar and the restoration of depressed Asian demand could also provide a helping hand to gold………………………………………..Full Article: Source

Here’s Why You Should Own Both Gold and Silver Right Now, Despite Pullback

Posted on 29 July 2016 by VRS  |  Email |Print

Under normal circumstances, when an investment is up double digits in just seven months, it’s a good time to sell. But with gold and silver, up 24% and 41%, respectively, so far this year, this may just be the beginning of a much bigger rally.
Of course, with that big of a jump in a short period of time, either one might be due for a pullback (more on that later). But even if the price of either falls, it will likely just be a short-term consolidation. Both gold and silver still have a long way to run. As we’ve previously explained, it’s not unreasonable to think gold prices could rise by as much as 500%. And, historically, when gold climbs, silver climbs even higher………………………………………..Full Article: Source

Metals M&A fall to lowest in two years – PwC report

Posted on 29 July 2016 by VRS  |  Email |Print

The metals deals market remained sluggish in the second quarter of 2016, with mergers and acquisitions activity down to its lowest level in two years, according to a report by PwC. While some metals commodity prices rebounded, metals prices, global demand, and production all generally remained low during the quarter, and companies continued to be challenged by global economic uncertainty and volatility, the report noted.
However, PwC said it was cautiously optimistic that improvement will be seen in the second half of 2016. “Growth in US gross domestic product and continued improvement in relevant end-use sectors like automotive, aerospace, and construction are expected to begin to drive increased demand for metals, and in turn, increased production and stabilisation in the industry,” PwC said………………………………………..Full Article: Source

Canada’s ETF industry crosses $100-billion mark

Posted on 29 July 2016 by VRS  |  Email |Print

Canada’s exchange-traded fund industry is on pace for another record year, with more than $10.6-billion in inflows so far in 2016, says BMO Global Asset Management’s semi-annual ETF Outlook Report, released Thursday. The report also says assets under management have surpassed the $100-billion mark, which is double what the industry had under management four years ago.
This growth is expected to continue, said Mark Raes, BMO Global Asset Management Canada’s head of product. “I’m surprised with all their benefits, [ETFs are] not more mainstream and accepted now,” he said. “Especially compared to the United States. We have some catching up to do.”……………………………………….Full Article: Source

Oil ETF Drops Into Bear Market Area And Short Sellers Crowd In

Posted on 29 July 2016 by VRS  |  Email |Print

ETFs tracking major domestic indexes closed mixed Thursday, as the stock market digested corporate earnings and fretted about an oil glut. The Dow industrials continued their losing streak for a fourth day.
Oil prices struck a new three-month low on Thursday after official data showed a surprise increase in crude oil and gasoline stockpiles. U.S. light crude settled at $41.14 per barrel. United States Oil (USO), a commodity exchange traded fund, dropped more than 2% as it fell for the sixth consecutive session. The ETF is now down roughly 22% from its 2016 high of 12.45, which technically marks bear market territory………………………………………..Full Article: Source

The Best Way to Trade Commodities Without Playing the Futures Market

Posted on 29 July 2016 by VRS  |  Email |Print

Investors love having as many options as possible available to them to make a profit. Stock trading software and platforms are a dime a dozen, and option trading has become equally ubiquitous in the everyday investor’s world. However, commodities always seemed just out of reach for all but the wealthy or professional investor.
Futures exchanges carry commodities, which can be traded. Futures are typically used by companies to hedge their product against adverse price movements. For example, a gold mining company may use futures to lock in a specific price for the gold it mined………………………………………..Full Article: Source

Anglo fears worst to come as commodities rally most since crisis

Posted on 29 July 2016 by VRS  |  Email |Print

Mark Cutifani is avoiding the temptation to feel complacent. The head of Anglo American has seen the miner’s share price almost triple this year, topping gains in the benchmark FTSE 100 Index. But that can’t erase the bad times Cutifani’s seen since becoming chief executive officer in 2013.
“We’re not convinced the worst is behind us,” he said in a Bloomberg Television interview with Manus Cranny and Caroline Hyde on Thursday. “There will be pressure on supply right across the commodity suite.”……………………………………….Full Article: Source

Currency Trading’s ‘Last Look’ Rules Are Changing, BOE Says

Posted on 29 July 2016 by VRS  |  Email |Print

A controversial practice in currency trading known as “last look” is beginning to change, according to the Bank of England, which is among the regulators to have scrutinized such market rules.
Some foreign-exchange platforms have changed their policies, giving priority to orders that are less susceptible to exploitation, the BOE said in a report on Thursday. It comes a year after Britain’s central bank said last look was vulnerable to abuse. London is the global center for currency trading, a $5.3 trillion market………………………………………..Full Article: Source

The global philosopher: Who should pay for climate change?

Posted on 29 July 2016 by VRS  |  Email |Print

Most climate scientists think the world is getting warmer and that humans are at least in part responsible. Almost every country in the world has pledged to make efforts to stabilise greenhouse gas concentrations in the atmosphere in order to prevent dangerous “interference with the climate system”. But exactly how to do this raises interesting questions about fairness.
To discuss them, we put Harvard philosopher Michael Sandel in a state-of-the-art digital studio - connected to 60 people in 30 countries. Here producer David Edmonds outlines three key puzzles………………………………………..Full Article: Source

Good emissions trading programs are unique, not one-size-fits-all

Posted on 29 July 2016 by VRS  |  Email |Print

Climate change is a global problem — but its solution relies on national, regional, and local policy actions. Take the issue of greenhouse gas emissions markets, which put a price on, say, the amount of carbon a country can release into the atmosphere.
There are about 45 substantial climate-focused markets around the world, including some operating within parts of a single country, such as California’s cap-and-trade program. But 195 countries developed the Paris Agreement in 2015 to reduce emissions. Can the trading schemes used in one place be readily adopted by others?……………………………………….Full Article: Source

Commodities ‘At Bottom,’ Says World Bank as Rebound Seen

Posted on 28 July 2016 by VRS  |  Email |Print

Commodities will probably rebound next year as demand strengthens, according to the World Bank, adding its voice to those including Citigroup Inc. who’ve forecast that 2017 may be a better year for raw-material prices.
The Washington-based lender pared its forecast for declines in 2016 in its latest quarterly outlook, and forecast a modest rebound next year. “We are at the bottom of the cycle,” Senior Economist John Baffes, the report’s primary author, said in a phone interview………………………………………..Full Article: Source

Baltic index down as rates for large vessels stay weak

Posted on 28 July 2016 by VRS  |  Email |Print

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Wednesday on weaker rates for larger vessels and supramaxes.
The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 17 points, or 2.44 percent, at 679 points. The capesize index fell 38 points, or 4.52 percent, to 803 points………………………………………..Full Article: Source

Commodity Prices Just Can’t Seem To Stay Up

Posted on 28 July 2016 by VRS  |  Email |Print

Oil prices dropped to a five month low yesterday with the apparent culprit being oversupply. Commodity prices, in general, have also tended to move in the same direction as oil prices, reflecting a feeling that there will be no real pickup in prices anytime soon.
Fed vice-chair Fischer has argued that oil and commodity prices would rebound to a much higher level and help to get inflation back up to the Fed’s target. Financial markets don’t seem to support Fischer’s assessment of the price outlook………………………………………..Full Article: Source

The Price Rally Is Over: Capital Drives the Oil Market to Low Prices

Posted on 28 July 2016 by VRS  |  Email |Print

The current oil-price rally is over. U.S. rig counts have surged as oil prices sink. Capital is driving the oil markets and it enables bad behavior by producers. That is why oil prices will stay low.
The oil-price rally that began in February is over. Prices rose from $26 per barrel to $51 by early June and are now below $42. If they fall through $40, the next likely support level is at $36 per barrel. Most people think that fundamentals–supply and demand–drive the oil market but capital drives the market and oil prices………………………………………..Full Article: Source

Could the oil price fall below $40 a barrel?

Posted on 28 July 2016 by VRS  |  Email |Print

The oil price is still stuck near a recent near three-month low – and some analysts believe it could fall below $40 a barrel before the latest downward move is finished.
International oil price benchmark Brent crude dipped back towards $44 a barrel this morning in London, less than a dollar above its 9 May low. The price indicator is set to record its first monthly fall in July since January, Reuters says, and at ten per cent, the drop will be proportionately the worst of the year so far………………………………………..Full Article: Source

Why Saudi Arabia Continues To Pump Crude At Record Levels

Posted on 28 July 2016 by VRS  |  Email |Print

As the Financial Times reported on 12 July, Saudi Arabia’s oil-output reached record highs in June 2016. Increasing production 280,000 barrels/day to 10.6m b/d, Saudi Arabia has once again waved off OPEC’s request not to glut the market with oil.
As it turns out, economic principles explain why the Saudis began, in late 2014, to pump crude as fast as they could – or close to as fast as possible. In fact, there is a good reason why the Saudi princes are panicked and pumping………………………………………..Full Article: Source

The Oil Price Recovery Is Drowning in Gasoline

Posted on 28 July 2016 by VRS  |  Email |Print

Just when it appeared crude oil’s supply problems were easing, a glut of gasoline is drowning the market’s hopes for a recovery.
Vast new supplies of gasoline around the world, combined with the overproduction of oil, has sent crude prices sliding. On Wednesday, oil prices continued to drop, with U.S.-traded crude hitting a three-month low, after a surprise increase in U.S. inventories of both oil and gasoline………………………………………..Full Article: Source

BNP Paribas Raises Gold-Price Forecast But Sees New Downtrend

Posted on 28 July 2016 by VRS  |  Email |Print

There is at least one more bear in the woods as analysts at BNP Paribas increase their gold -price forecast for 2016 but look for the price to trend lower through the rest of the year and 2017.
In an email response to Kitco News regarding the bank’s new forecast released late last week, Harry Tchilinguirian, global head of commodity markets strategy, said the strong performance during the first half of the year forced them to raise their base prices for 2016 and 2017, but “the path of least resistance is lower and not higher.”……………………………………….Full Article: Source

Gold Moves Higher After Fed Statement

Posted on 28 July 2016 by VRS  |  Email |Print

Investors who stepped to sidelines ahead of central bank meeting will likely jump back in, strategist says. Gold prices traded higher Wednesday after the Federal Reserve left interest rates unchanged but hinted at the possibility of an increase in the coming months.
Gold for December delivery was recently up 0.9% at $1,339.50 a troy ounce on the Comex division of the New York Mercantile Exchange in electronic trading. Prices settled up 0.5% at $1,334.50, but traded as low as $1,323 after the Fed statement was released………………………………………..Full Article: Source

Why gold prices spiked after the Fed decision

Posted on 28 July 2016 by VRS  |  Email |Print

Gold futures rallied to their highest level in two weeks late Wednesday in electronic trading. Many gold investors settled on the notion that the Federal Reserve was actually dovish—in favor of maintaining low interest rates—despite the central bank leaving an interest-rate rise on the table for September.
“The Fed has had numerous opportunities to normalize rates over the past two years and have squandered them all,” said Peter Hug, global trading director at Kitco Metals Inc. in an emailed note after the Fed statement………………………………………..Full Article: Source

More gold price falls? Factors to watch out for

Posted on 28 July 2016 by VRS  |  Email |Print

More downside is expected for gold as investors anxiously await the US Federal Reserve’s decision on interest rates that will be known on Wednesday evening. Analysts are forecasting the bullion to move lower towards $1,300 per ounce instead of climbing to the $1,400 level.
The Fed’s ruling on interest rates can have drastic impact on the precious metal, as well as the US dollar. Increased rates could put pressure on gold prices. In Dubai, retail rates remained stable on early Wednesday morning, ahead of the Federal Reserve Open Market Committee (FOMC) discussions………………………………………..Full Article: Source

Base metal mining market - infrastructure development activities to be key enabler of growth

Posted on 28 July 2016 by VRS  |  Email |Print

Global estimates entail that nearly 40% of the world economy is directly or indirectly affected by the mining industry. Consistent supply of base metals such as copper, zinc, nickel, aluminum, and tin is central to the development of sectors such as infrastructure, construction, manufacturing, transportation, equipment, and utilities. Flourishing growth across these sectors in the past few years, especially in developing regions such as Asia Pacific, is the major demand driver of base metals in the global market.
The European Union has significantly increased its investment aimed at the development of the region’s energy infrastructure, to make it more complaint with renewable energy sources, in the past few years. Transportation, construction, and equipment industries, which are some of the principal consumers of a number of base metals, are also expanding at a plausible rate across the globe. (Press Release)

Japan’s spot aluminum premiums fall as stocks rise in Asia

Posted on 28 July 2016 by VRS  |  Email |Print

S&P Global Platts assessed spot premiums for aluminum imports into Japan at $76-$77/mt plus LME cash CIF Japan Wednesday, down from $79-$80/mt the day before, under pressure from rising stocks in Asia.
An international trader bought 1,000 mt of ingot at $76-$77/mt plus LME cash CIF Japan last week. The metal was 99.7% purity-guaranteed material excluding Russian, Indian, Malaysian, Egyptian, and Iranian origins. Continuing downward pressure was likely to result in a further fall in premiums, buyer and seller sources said………………………………………..Full Article: Source

New Call To Boost European ETF Lending

Posted on 28 July 2016 by VRS  |  Email |Print

Securities industry veterans Roy Zimmerhansl and Andrew Howieson have published a white paper calling for structural changes in the European ETF market to facilitate the more widespread lending of fund shares.
A more active securities lending market in ETFs, say Zimmerhansl and Howieson, will provide a critical boost to the secondary market liquidity of European ETFs. The liquidity of European ETFs in secondary trading is currently significantly below that of the US ETF market. Investors would also benefit from more widespread securities finance activity in ETFs, say the authors………………………………………..Full Article: Source

Learn: Precious Metals ETPs

Posted on 28 July 2016 by VRS  |  Email |Print

Investors turn to gold, silver and platinum for many reasons: inflation protection, risk management or even speculation. Metals ETPs have been enormously popular with investors in part because they can actually hold and store the physical underlying metal; thus, their fair value reflects the actual spot price.
In contrast, most other types of commodity ETPs depend on financial derivatives—commodities futures—to gain exposure. As a result, they incur additional costs and often gain unwanted exposure to variations between the futures markets prices and the spot prices of commodities. Fortunately, when it comes to physically held metals ETPs, it’s all about spot………………………………………..Full Article: Source

India: MCX wins best commodity exchange award

Posted on 28 July 2016 by VRS  |  Email |Print

The country’s largest commodity exchange MCX has been awarded as the ‘Best Commodity Exchange’ by the Bullion Federation, a national level apex body of bullion industry.
The award recognises MCX’s commitment towards developing a vibrant commodity futures market in India by providing a robust and efficient platform for price discovery and risk management across a diverse range of precious metal, energy, base metal and agriculture products, the exchange had said in a statement on Tuesday………………………………………..Full Article: Source

Why currency wars will cause the world more financial pain

Posted on 28 July 2016 by VRS  |  Email |Print

The currency wars raging across global markets are entering a more dangerous phase. Japan and Europe are likely to further ease monetary policy in an attempt to weaken their currencies to address the lack of growth and low inflation.
China, meanwhile, needs to devalue to help manage a slowing economy, property bubble, industrial overcapacity, fragile banking system and export-dependent, debt-based economic model. These efforts may not work. For example, both the yen and euro so far have proved resilient, remaining stable or even rising despite actions designed to devalue the currency………………………………………..Full Article: Source

Scotland Considering Cryptocurrency as Independent Currency Option

Posted on 28 July 2016 by VRS  |  Email |Print

People in Scotland have started exploring different currency options following Brexit. There have been calls for the Scottish referendum in the past. While Scotland decided against leaving the United Kingdom in the past, the recent vote by Englanders to leave the European Union may soon have the UK witnessing renewed calls for the separation of Scotland.
The Common Weal think tank in Scotland has recently published a report with 9 different currency options for the region if it were to dissociate itself from the UK………………………………………..Full Article: Source

Climate Change and Emissions Trading Programs

Posted on 28 July 2016 by VRS  |  Email |Print

Climate change is a global problem — but its solution relies on national, regional, and local policy actions. Take the issue of greenhouse gas emissions markets, which put a price on, say, the amount of carbon a country can release into the atmosphere.
There are about 45 substantial climate-focused markets around the world, including some operating within parts of a single country, such as California’s cap-and-trade program. But 195 countries developed the Paris Agreement in 2015 to reduce emissions. Can the trading schemes used in one place be readily adopted by others?……………………………………….Full Article: Source

Indonesia to tap into rich blue carbon potential

Posted on 28 July 2016 by VRS  |  Email |Print

The nation is set to take advantage of its blue carbon potential, estimated to be huge, as the country’s seagrass and mangroves account for 17 percent of the world’s blue carbon reserves.
Blue carbon is the carbon captured by the world’s oceans and coastal ecosystems. Mangroves and seagrass bind carbon dioxide and water, and, with the assistance of sunlight, is converted into sugars and oxygen to support their growth. The excess production of the plant is buried in the sediment, where it can remain stored………………………………………..Full Article: Source

Buy Commodities; They Shouldn’t Be Tanking

Posted on 27 July 2016 by VRS  |  Email |Print

There’s a new meme going around that claims that we’re heading into a global economic slowdown. It sounds a lot like the other dire warnings that we heard in February, May and most recently in June right after the Brexit vote: “Slowdown! Crash! Recession! Catastrophe!” But the fearmongers were wrong then, and I believe that they’re wrong now.
Granted, the global economy isn’t growing very rapidly. But it is growing — and has defied all expectations of a recession so far because we continue to see high and rising levels of fiscal stimulus from the world’s major economies. That means the United States, China, Japan and very soon even the European Union (I predict)………………………………………..Full Article: Source

Why Commodities Stay Low While Growth Continues

Posted on 27 July 2016 by VRS  |  Email |Print

The commodity pits are aghast. The economy keeps growing while commodity prices remain depressed. Inconceivable does mean what they think it means. Efficiency is the decade’s watchword. Public good demand will come, from somewhere, next year.
The rise is all based on hope for commodities, especially for things like copper and gold. Copper is up over the last month, gold over the last three. This has spurred regular rallies in FCX stock, although when the hope turns out to be misplaced, the stock goes back down. It’s down again today, after losing another penny per share and disappointing on the revenue side………………………………………..Full Article: Source

Can commodities maintain their Midas touch?

Posted on 27 July 2016 by VRS  |  Email |Print

Commodities have been on a tear this year. Led by gold, the commodity complex emerged as the best performing asset class of the second quarter and first half of 2016, according to Citigroup. The Wall Street bank expects the strong performance of commodities to continue this quarter and through to the end of the year, as investors continue to show interest in commodity-based investment funds.
“This is in stark contrast to the last two years, during which time commodities sold off during the second half, leading the asset group to be the worst performing (asset class) compared with equities and debt securities,” the bank said in a recent report………………………………………..Full Article: Source

Is The Commodity Rebound Over?

Posted on 27 July 2016 by VRS  |  Email |Print

One of these two camps of risk assets is sending the wrong signal: Emerging markets and junk bonds, or commodities – and more particularly, oil. While crude oil and commodities in general have weakened notably in July, both emerging markets and junk bonds finished on a high note last Friday.
Emerging markets can be replicated in the MSCI Emerging Markets Index, while commodities can be measured by the CRB Commodity Index or by the price of crude oil as the most important commodity. In this chart, the Emerging Markets Index (in red) roughly replicates the oil price (black line) until the last month………………………………………..Full Article: Source

Despite Slump in Commodity Prices, Africa among Fastest Growing Regions

Posted on 27 July 2016 by VRS  |  Email |Print

Notwithstanding a relative slowdown as a result of the prolong drop in commodity prices, sub-Saharan Africa remains one of the fastest growing regions in the world, a report has shown.
This was reflected in the foreign direct investment (FDI) levels in 2015, where FDI project numbers increased by seven per cent, according to EY’s (Ernst & Young) 2016 Africa attractiveness programme titled: “Staying the course, despite a relative slow down,” obtained on Monday………………………………………..Full Article: Source

World Bank Raises Oil Prices Forecast to $43

Posted on 27 July 2016 by VRS  |  Email |Print

The World Bank is raising its 2016 forecast for crude oil prices to $43 per barrel from $41 per barrel due to supply outages and robust demand in the second quarter. Oil prices jumped 37 percent in the second quarter of 2016 due to disruptions to supply, particularly wildfires in Canada and sabotage of oil infrastructure in Nigeria. The revised forecast appears in the World Bank’s latest Commodities Markets Outlook and takes into account a recent softening of demand and the recovery of some disrupted supply.
“We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes,” said John Baffes, Senior Economist and lead author of the Commodities Markets Outlook. “However, inventories remain very large and will take some time to be drawn down.”……………………………………….Full Article: Source

The question is not why oil prices have fallen, but why they have not fallen further

Posted on 27 July 2016 by VRS  |  Email |Print

Hedge funds and other money managers have begun to amass another large short position in futures and options contracts linked to the price of crude oil. But the current wave of short-selling has been associated with a much smaller decline in WTI prices than last summer, at least so far.
Hedge funds increased their short positions in NYMEX WTI futures and options from 53 million barrels on May 31 to 141 million barrels on July 19, anticipating a further drop in prices………………………………………..Full Article: Source

Oil slumps on surging supply but global economy picks up speed

Posted on 27 July 2016 by VRS  |  Email |Print

Oil prices have tumbled to a three-month low as surging supply once again exposes the chronic global glut and threatens to perpetuate the energy slump for another year. US crude contracts crashed through key technical barriers to $42.40 on Tuesday before recovering slightly in late trading on profit-taking. They have fallen by 9pc over the last four sessions.
Speculators have given it an extra push. Data from the Commodity Futures Trading Commission in the US shows that 52 hedge funds have taken out large short positions, betting that the summer sell-off still has a further leg to run………………………………………..Full Article: Source

Oil market disaster: This is a glut without end in sight, expert says

Posted on 27 July 2016 by VRS  |  Email |Print

The oil industry is still “a disaster,” with an oversupply issue that doesn’t appear to be balancing out anytime soon, John Kidluff, partner at Again Capital, said Tuesday. Kilduff, who has been bearish on crude, pointed out that refiners are soon going to go into their seasonal maintenance.
“The little bit of oil that got taken out of storage for the past 12 weeks or so, in terms of inventory reports, is going to come right back on,” he said……………………………………….Full Article: Source

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