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Commodities Briefing 24.Feb 2011

Posted on 24 February 2011 by VRS |  Email |Print

From WSJ: Commodity market investors must think it’s Christmas all over again. Disruptions to oil supplies, turmoil in the Middle East and plenty of confusion—the perfect cocktail for an anxiety-led rollercoaster ride in commodity prices.
The world has watched while unrest in Tunisia has spread to Egypt and across the region to Bahrain, Jordan and Yemen. But until now, the impact of the protests on commodities has been limited to a price-adjustment based on the value of the U.S. dollar………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

Fatih BirolFrom Telegraph: Libya’s descent into civil war has led to drastic cuts in oil shipments and prompted warnings that an escalation of the crisis could see Brent crude prices double to $220 a barrel.
Nomura’s commodity team said oil prices risk vaulting to uncharted highs over coming weeks if chaos hits Algeria as well, reducing global spare capacity to the wafer-thin margins seen just before the first Gulf War………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Guardian: The competition for most alarmist oil forecast has an early front-runner – $220 (£136) a barrel if both Libya and Algeria were to halt production, say analysts at Nomura. Anything is possible, of course, and any almost any guess is plausible if Saudi Arabian production (12% of global production) were threatened.
But Julian Jessop at Capital Economics makes the valid point that it makes sense to look at the impact of high oil prices on economies on a case-by-case basis………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Time.com: Libya’s leader Muammar Gaddafi’s rule seemed to hang by a thread on Monday as the Middle East’s wave of revolts threw North Africa’s biggest oil power into turmoil, threatening not just to end Gaddafi’s 41 years in power, but to rock the petroleum world too.
With up to 300 people estimated to have been killed during a week of clashes between protesters and security forces, the price of oil futures soared in London and New York City, as oil companies raced to extract their staff from the mounting chaos………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From AP: Oil hit $100 per barrel Wednesday for the first time in 2 1/2 years as the unrest in Libya worsened, and gasoline prices in the U.S. climbed to nearly $3.20 a gallon, the highest level ever for February.
West Texas Intermediate crude for April delivery jumped $2.68, or 2.8 percent, to settle at $98.10 per barrel on the New York Mercantile Exchange………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Commodities-now.com: Due to the recent gas glut, a link between the gas price and the oil price makes increasingly less sense. New US gas deposits are in fact calling into question nearly all medium and long-term scenarios which still seemed plausible a few years ago.
As a result of the huge deposits, new strategies for the use of excess supply are currently being discussed in the US. If gas exports were possible, this would be another great challenge for all de facto price links to the oil price that are still in place in Europe, and possibly even the final nail in the coffin………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Arabnews.com: Minister of Petroleum and Mineral Resources Ali Al-Naimi said Tuesday OPEC is prepared to meet any shortage of supplies due to unrest in the Middle East and that its members have sufficient spare capacity to do so.
“There is absolutely no shortage of supply now … OPEC is ready to meet any shortage in supply when it happens,” Al-Naimi told a press conference at the end of a consumer-producer meeting that signed a cooperation charter. “There is concern and fear, but there is no shortage,” the minister reiterated………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Reuters: The International Energy Agency will rely first of all on OPEC to meet any loss of Libyan oil and would save its emergency stockpiles as a last resort, its executive director said.
“We can produce 2 million barrels per day (bpd) for two years but these are stocks and once we use them, they will run out, unlike spare capacity,” Nobuo Tanaka told Reuters. “That’s why the stocks are for great emergencies.”……………………………………….Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Ninemsn.com.au: For years, hedging was a dirty word among gold and silver miners. It meant they had to sell much of their future gold or silver production at low, fixed prices when prices were in the doldrums. And it led to losing fabulous opportunities at a fortune as gold and silver prices rose sharply.
Naturally, stockholders didn’t take well to that news. They pressured the companies to spend billions over the last several years to buy back those hedges. And the way that idea caught on, some industry insiders thought hedging was gone for good………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From WSJ: Mergers and acquisitions activity in the mining and metals sector will stay strong in 2011 due to emerging market demand for raw materials and better access to capital, an Ernst & Young report said Wednesday.
Ernst & Young said in a latest annual transaction report that the number of deals in 2010 was up only 7% from a year earlier at 1,123, but noted that the total deal value rocketed up 89% to $113.7 billion last year, from $60 billion the year before………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Mineweb.com: While gold prices are still likely to rise, Tiberius Asset Management believes gold is likely to underperform the rest of the precious metals complex this year.
To be fairly honest other factors for gold are obviously that we see massive inflows in the commodity sectors in general, and as you know, most of commodity indices or commodity products these days do have a certain kind of percentage of gold, be it maybe 3%, 5% or 7%, but that also drives the gold price and the general interest in commodities and that, added to the overall geo political risk - that’s why we see gold prices above $1,400 again………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Mineweb.com: While gold is expected to continue to rise over the course of 2011, other metals are likely to take centre stage in the performance tables over the year. Gold has risen every year of the last ten and, after a short breather in January, seems to be continuing its rise.
But, while many investors still view gold as the ultimate safe haven in times of change and unrest, there are some that believe returns may be better elsewhere………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Commodity Online: Gold prices are well supported by geo-political tensions and investment demand which is being emerged from developing countries like India and China. Hedge funds are also buying the Gold because of rising global inflation worries as Gold is considered as a hedge against inflation.
USD is also becoming strong against Euro and other major currencies. It means that investors are parking their funds in USD and bullion assets like Gold and Silver………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Indiatimes.com: Looking for the best returns on your hard-earned money? Call up any market player and the advice you are likely to get is to invest in silver. The precious metal has emerged as the best-performing asset both over the last 12 months as well as over the last five years, comfortably outpacing gold, the traditional favourite.
“Silver is the new gold,” confirmed Jayant Manglik, president of brokerage firm Religare Commodities………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Seekingalpha.com: The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It’s already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying?
I’ve read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it’s headed higher………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Barrons.com: With oil futures moving higher and civil strife building in Libya, traders today are again bidding up ETFs that invest in precious metals and commodities.
Commodities and gold as well as silver are being viewed as safer plays in a tense political environment with a key oil producing state engaged in civil war. “The price of gold should remain well supported as long as there is no sign of tension easing in the Middle East,” Commerzbank strategists noted……………………………………….Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Reuters: With stocks falling and oil surging on Mideast turmoil, getting into an ETF based on crude prices might seem a great way to invest in a few barrels.
But the way new ETFs are trading it’s more like getting half barrels with a lot of suds on top………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Marketoracle.co.uk: Antony P. Mueller writes: In September 2010, a short time before the international financial summit of the Group of Twenty (G20) took place in South Korea, Brazilian finance minister Guido Mantega declared that the world is experiencing a “currency war” where “devaluing currencies artificially is a global strategy.”
By announcing the outbreak of a “currency war,” Mantega wanted to draw attention to the problems caused by the ongoing exchange-rate manipulations that governments put in place in order to gain economic advantages………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Wallstreetpit.com: Anytime the global market markets have come under pressure the U.S. Dollar has rallied higher as a safe haven trade. Investors will usually run and buy U.S. Dollars as a form of security. After all the dollar is the world’s reserve currency.
However, since the protests and riots began in the Middle East over a month ago the U.S. Dollar Index has declined lower. This is very uncharacteristic of what we have seen over the past 10 years……………………………………….Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Bloomberg: Asian currencies rose from a one- week low on speculation regional central banks will raise interest rates to counter the effect of a surge in oil prices on inflation, boosting the yield premium on local assets.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies, added 0.2 percent to 116.23 as of 4:33 p.m. in Hong Kong. It earlier reached a low of 115.95………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Bloomberg: India’s largest power exchange began trading the country’s first renewable-energy credits, saying the new commodity may develop a liquid market by year-end.
The first trading session today on the Indian Energy Exchange received 11 buy bids seeking certificates from solar plants and 125 bids for certificates for renewable energy from wind, hydropower or biomass projects, according to Jayant Deo, chief executive of the exchange………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Idg.no: The European Commission has called for a series of reviews to beef up the security of the European carbon market following a series of cyber-thefts.
The European Commission has called for a series of reviews to beef up the security of the European carbon market following a series of cyber frauds………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Ctv.ca: The political turmoil in Libya is having an unexpected consequence: It could help tame food inflation. Prices for nearly all agricultural commodities including wheat, corn, canola, rice and soybeans, have fallen sharply this week after rising to near record levels.
Wheat dropped 7 per cent Tuesday on the Chicago Board of Trade, but rose slightly Wednesday. It is now down roughly 15 per cent since reaching a 29-month high on Feb. 9. Soybeans hit a two-month low this week and corn fell as much as 6 per cent this week before rallying slightly Wednesday………………………………………..Full Article: Source

Posted on 24 February 2011 by VRS |  Email |Print

From Reuters: U.S. wheat ended higher on Wednesday after posting the biggest three-day slide since 2008 as bargain buying helped to thwart fund long liquidation amid the escalating unrest in Libya and rains in drought-hit China.
Corn futures surged nearly 2 percent and soybeans gained 1.7 percent after falling on Tuesday by the daily trading limit as investors sought less risky bets amid the upheaval in Libya, where the unrest was escalating amid a government crackdown………………………………………..Full Article: Source

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