Sat, May 15, 2021
A A A
Welcome vaishu
RSS
Commodities Briefing 07.Aug 2015

Posted on 07 August 2015 by VRS |  Email |Print

What is falling harder than commodity prices? Some exchange-traded funds that seek to track the companies that dig and drill for raw materials and fuel. It is no small feat to overshadow recent declines in industrial materials such as oil and metals. The Bloomberg Commodity Index, which tracks the prices of 22 raw materials, this week hit a 13-year low and is down 13% this year.
For 2015, copper prices have slumped 17%, oil prices have dropped 16% and gold prices have fallen 8%. Exchange-traded funds that track these commodities are down by a similar percentage. But some exchange-traded funds that invest in and aim to track the share prices of commodity-producing companies are doing much worse………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Commodity investors stung by the four-year bear market made one simple mistake: investing in an asset class not backed by a central bank. Whereas equities and bonds have benefited from very meaningful support, direct and indirect, from central bank asset-purchase programmes, commodities have not.
That may or may not be good policy; certainly you can argue that the current downdraft in commodities prices reflects a singular lack of inflation risk in the global economy. That might argue for more quantitative easing, but given that what we’ve had so far has neither generated much inflation or kindled demand for raw materials, it would be hard to be too sure that more central bank buying of financial assets would help commodities prices………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Investors in soft commodities are used to being slaves to the weather’s twists and turns. With prices now in a depression and the El Niño weather pattern looming, the forecast looks more unsettled than normal.
The possibility that the Federal Reserve will raise interest rates later this year, coupled with a strong U.S. dollar as a result, have weighed on prices of commodities already under pressure thanks to slowing growth in the key Chinese market. Soft commodities haven’t been spared, with sugar trading around six-year lows, dairy at 13-year lows and palm oil down around 13% so far this year………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Factors have been conspiring to take the commodities market on a stiff ride—downwards. Nervous investors have watched everything from oil and natural gas to sugar, industrial metals and even precious metals plunge, with some items hitting price levels not seen in more than a decade.
Oil, of course, has been in the headlines for months as its price has moved downward, but there’s plenty of other turmoil bedeviling investors. Some of the downward pressure has come from the possibility—or threat—of the Fed raising interest rates at long last, which would boost the dollar against gold. But there are other forces at work, too. A slowing economy in China has lessened demand for raw materials, but it’s not just China—and it’s not just the slowing economy………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

The oil market is setting up for a prolonged period of low prices, unless there’s a dramatic shift in strategy by producers. Those producers range from Saudi Arabia and Iraq, to the upstart shale drillers of Texas and North Dakota whose surprising success initially set off a market share battle with the world’s largest oil exporters.
“What you’re seeing now is the price crisis some had expected last winter. Just a few weeks ago, confidence was coming back and people were saying, ‘$70 was the new $100.’ Reality intruded,” said Daniel Yergin, vice chairman of IHS………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

It rankles when you lose $20. But hey, at least it isn’t $4.4 trillion. That is roughly how much revenue the world’s oil producers will forego over the next three years, based on the current outlook for prices and demand, relative to what was expected just a year ago.
With Brent crude having tumbled back below $50 a barrel, the industry has entered a vicious, and spreading, bout of deflation. A year ago, futures indicated an average Brent crude-oil price in 2016 through 2018 of about $101 a barrel. Today, that is just under $60. Estimates of future demand have also been marked down slightly. The implied hit to oil producers’ revenue is about $4.4 trillion spread across those three years………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Saudi Arabia has a challenge in Asia as it battles to maintain market share: The Russians are coming and other OPEC members want a bigger slice. It’s a market the Saudis have vowed to defend, leading the decision by the Organization of Petroleum Exporting Countries to sustain output as surging U.S. production crippled prices and pushed cargoes to Asia.
While the origins of this competitive shift started with the American shale boom, the return of Iranian exports poses another test for the kingdom. “No other region needs more oil in the future than the Asia Pacific,” Sushant Gupta, the head of Asia downstream research at Wood Mackenzie in Singapore, said by phone. “It’s an absolutely important market for Saudi Arabia.”……………………………………….Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

The oil kingdom is facing a big hole in its budget, caused by the slump in oil prices and a sharp rise in military spending. That’s forcing the government to raid its reserves, and it may even borrow from foreign investors, analysts say.
Saudi Arabia has already burned through almost $62 billion of its foreign currency reserves this year, and borrowed $4 billion from local banks in July — its first bond issue since 2007. Its budget deficit is expected to reach 20% of GDP in 2015. That’s extraordinarily high for a country used to running surpluses. Capital Economics estimates that government revenues will fall by $82 billion in 2015, equivalent to 8% of GDP. The IMF is forecasting budget……………………………………….Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

A commodities hedge fund run by star trader Andy Hall is getting hammered by the collapsing oil price. Hall’s Astenbeck Capital Management fund lost about 17% in July, Reuters reports, citing an investor letter.
That is the second largest loss the fund has ever experienced. Its assets under management are now about $2.8 billion, down from $500 million in June, according to Reuters. The oil fund also posted losses in May and June, according to Reuters………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

There was more negative research published for gold Thursday, as Bank of America/Merrill Lynch predicted that the metal could break below $1,000/oz heading into 2016. Analyst at the bank Michael Widmer noted that gold prices have shown a persistent lack of strength in recent months “driven by a confluence of factors. Most notably perhaps, physical off-take in India and China.”
Combined the two countries represent roughly 50% of global physical gold demand. China takes the top spot for both gold consumption and production. “India still feels the aftermath of a range of measures aimed at dampening imports to reduce the nation’s current account deficit,” said the analyst………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

As gold continues to languish near its lowest price in five years, one element seems to be missing: traders. Volume so far in August, already a slow time of year, has dropped about 8 percent from 2014. On Thursday, trading was about 40 percent below the 100-day average.
With fewer participants, the metal’s volatility has tumbled to the lowest in nine months. Gold traders are awaiting a U.S. jobs report due on Friday. A gain for employment could push the Federal Reserve to tighten monetary policy sooner, cutting the appeal of bullion because it doesn’t pay interest………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

In its second quarter results announcement Barrick Gold Corporation, the world’s largest gold miner in terms of output, cut its dividend by 60% and said it will embark on a program to sell more mines and make deeper cost cuts. Shares in the Toronto-based company was up sharply on Thursday amid a generally positive day for gold miners, but its market value is still down 45% over just the last three months. The company is worth some $8 billion in New York.
Barrick is forecast to produce between 6.1m – 6.4m ounces this year and while it’s had some problems of its own making it is obviously highly exposed to a fall in the gold price. It’s market cap today compares to $64 billion when gold peaked at $1,900 in 2011……………………………………….Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Down 9% over the past three months and lighter by $1.25 billion in assets this year, the SPDR Gold Shares has not been an exchange traded fund of beauty, but it cannot be said GLD and rival gold funds have been boring. While it remains to be seen if some boredom will benefit GLD and friends, putting gold volatility into historical context could be a harbinger that volatility is about to wane in the bullion market.
“At the end of the 1980s period of price volatility, gold entered a two-decade long era of relatively subdued price movement. As the inflation panic eased, so did the price of gold. In 2011, the panic was the financial crisis. That, too, has been easing; with it again, the price of gold,” reports Lorcan Roche Kelly for Bloomberg………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Investors have previously turned to silver exchange traded funds as an asset with a safe store of value and as a metal with wide industrial application in a growing economy. However, the precious metal is now suffering from a bad turn on both fronts.
Silver, like gold, is losing ground among investors seeking a hedge against market volatility or a store of value against inflationary pressures, reports Christian Berthelsen for the Wall Street Journal. Many market participants are anticipating the Federal Reserve to hike interest rates for the first time in almost a decade, which will diminish the attractiveness of holding assets with no yields………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

The Russian rouble led weakness among emerging market currencies on Thursday, slipping to its weakest level against the US dollar since February. The dollar was up 0.6 per cent against the rouble at Rbs64.048, with Russia’s currency failing to benefit from firmer oil prices on Thursday.
The rouble has eased for eight out of the last nine trading sessions, a slide that has earned Russia the dubious title of being the worst performing major currency over the past three months. During this time it has fallen 21 per cent, tracking a 26 per cent drop in the price of Brent crude oil………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

Since the Chinese Renminbi, abbreviated as RNB, was de-pegged from the US Dollar (USD) in July 2005, the USD/CNY has depreciated by more than the 30%, demonstrating as the RNB is gaining acceptance around the world. Its unit of measure is the Yuan, abbreviated on markets as CNY.
The Renminbi, which literally means “People’s currency”, was issued shortly before the takeover of the mainland by the Communists in 1949. For decades it has been exchanged at unsatisfactory levels because of the command economy established in China. In 1997 it was pegged to the US Dollar, till July 2005, when the peg was removed………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

“I am convinced that no challenge poses a greater threat to our future, to future generations, than a changing climate,” declared Barack Obama on August 3rd. The president’s announcement of America’s first national standards to limit carbon-dioxide emissions from power plants had to be moved indoors to escape the sweltering weather. The response from Mr Obama’s political opponents was even hotter.
Mitch McConnell, the Senate majority leader, described the new rules as, “a triumph of ideology over sound policy and honest compassion”. He encouraged states to ignore them. In political terms, Mr Obama’s new rules are momentous. As far as their likely impact on the climate or on America’s energy sector are concerned, they are more modest than the claims made by either side would suggest………………………………………..Full Article: Source

Posted on 07 August 2015 by VRS |  Email |Print

It’s the moral responsibility of our generation to do something to mitigate this climate disruption for present and future generations. “The United States is leading by example today, showing the world that climate action is an incredible economic opportunity to build a stronger foundation for growth”, said EPA Administrator Gina McCarthy. “This is our moment to get something right and get something right for our kids“.
New Jersey must cut its carbon emissions by almost 26 percent in the next 15 years. The final rule establishes guidelines for states to follow in developing and implementing their plans, including requirements that vulnerable communities have a seat at the table with other stakeholders. “The way they want to do it is by reducing coal”………………………………………..Full Article: Source

See more articles in the archive

banner
banner
banner
banner
May 2021
S M T W T F S
« Nov    
 1
2345678
9101112131415
16171819202122
23242526272829
3031