Oil rises above $114 falls towards $112 on storm threat, stimulus hopes
8:47 AM
Unknown
Oil rises above $114 falls towards $112 on storm threat, stimulus hopes
he euro zone's blue chip Euro STOXX 50 index was down about 0.1 percent after the Ifo data at 2,431.10 points, although volumes were thin as the British market, Europe's largest, was shut for a public holiday.
The main German stock index was little changed, recovering some of its earlier losses, as some of the Ifo institute's findings were not as bad as many feared.
The euro also rose to $1.2530 after the Ifo survey was released, up 0.15 percent on the day, but was holding below a peak of $1.2590 set last Thursday.
Analysts said the weaker outlook in Europe's biggest economy could also support political efforts to find a solution to the region's fiscal crisis, in part by supporting arguments made by German Chancellor Angela Merkel and European Central Bank President Mario Draghi.
"The declining growth rate in Germany shows that the country is not immune from the general slowdown in Europe and outside Europe," said BNP Paribas economist Dominique Barbet.
"This could help Merkel and Draghi convince German people that more efforts to support the euro zone are necessary and are in the interest of Germany."
Crude oil futures reversed earlier gains to fall towards $112 a barrel on concerns that a tropical storm would shut U.S. refineries and as western governments mulled the release of strategic reserves to calm oil prices.
Tropical Storm Isaac swirled into the Gulf of Mexico on Monday and began approaching the Louisiana refining hub, prompting U.S. energy companies to start shutting refineries and raising prospects for a jump in crude oil stocks.
Brent crude futures were down by $1.59 at $112 a barrel by 1359 GMT after earlier falling more than $2.
U.S. crude was down by $1.35 at $94.80.
"With refineries shutting down along the U.S. Gulf Coast, traders are weighing this up and seeing there may be a glut of crude oil in the market," Carl Larry, analyst at OilOutlooks in New York said.
"Isaac is also adding to talk of a possible release from the Strategic Petroleum Reserve, so traders are cautious at these levels after a 2-month long rally," he added.
Marathon Petroleum Corp said on Monday it was initiating the shutdown of its 490,000 barrels-per-day (bpd) refinery in Garyville, Louisiana.
In another indication that regional crude stocks could rise, a fire burned for a third day at Venezuela's biggest refinery on Monday, raising doubts about a speedy restart to operations.
Oil prices have risen nearly 30 percent since June with international sanctions hitting Iranian exports and maintenance affecting North Sea oil flows.
Reuters reported that the White House was "dusting off" old plans for a possible release on fears that rising oil prices could undermine the effect of sanctions on Iran.
Brent crude futures were up $1.04 at $114.63 a barrel by 1022 GMT. U.S. crude was up $1.0 at $97.20.
Tropical Storm Isaac swirled into the Gulf of Mexico on Monday and meteorologists at Weather Insight, an arm of Thomson Reuters, predict the storm will spur short-term shutdowns of 85 percent of the U.S. offshore oil production capacity.
"The storm is probably helping but there's better sentiment generally. Everybody is waiting to see if Jackson Hole will be a turning point for commodities," said Eugen Weinberg, global head of commodities research at Commerzbank.
Central bankers and economists are due to meet in Jackson Hole, Wyoming later this week where Fed Chairman Ben Bernanke will deliver a speech that will be scoured for clues on a third round of quantitative easing.
He told a Congressional oversight panel in a letter that the Federal Reserve has room to deliver additional monetary stimulus to boost the U.S. economy.
The markets will also look for policy signals from the euro zone ahead of a September 6 meeting of the European Central Bank. RESOURCES
Posted in 
Oil Prices Could Sky-rocket Despite Low Demand 2012-2013
8:12 AM
Unknown
Crude oil rallied alongside other commodities and the euro to its highest in three months last week on NYMEX, mostly from market’s expectation of new Euro Zone bailouts and a third round of quantitative easing from the U.S. Fed.
Crude oil had continued the uptreand after the Energy Dept. reported a decrease of U.S. oil inventory by 5.4 million barrels in the week of last Friday. Scanning the news, you are likely to see quotes such as “The [EIA inventory] report is relatively supportive,” and “Supply concerns persist due to Iran dispute, Syria tension.”
On the crude oil side, although crude stockpile has gone through four consecutive weeks of draw, it is still above the 5-year range (See Chart Below). Moreover, as we are heading into the slow demand season of the year, inventory most likely will start to build again.
 |
| Source: U.S. EIA, August 22, 2012 |
About That ”Tight” Gasoline Market
Inventories of gasoline (and diesel) in the U.S. are at their lowest levels for this time of year since 2008 (partly due to recent refinery fires and the closing of some refineries in the Northeast). Gasoline futures have soared 19% over the past two months as traders seem to be betting that prices of gasoline and diesel will continue to rise. Pump prices typically lag behind the futures market by several weeks.
However, America’s demand for fuel dropped to the lowest July level since 1995, plus the summer driving season is nearing an end, which will lead to even lower gasoline demand.
Furthermore, domestic refiners have significantly ramped up fuel exports. For the first seven months of the year, exports were 14% higher than during the same period in 2011, according to API (American Petroleum Institution) data. What that means is that there are more product supply could be diverted for domestic use. And even if there’s a real shortage for whatever reason, refiners can draw more oil from the abundant stockpile.
Iran Oil Sanctions: Where There’s a Will, There’s a Way
Regarding the “supply concern” due to Iran oil sanction by the western nations, Saudi has cranked up oil production to multi-decades high ahead of the actual sanction that took effect on July 1. Reuters also got the latest scoop that Iran oil are still finding plenty of buyers:
Top Asian buyers — China, India, Japan and South Korea together take more than half of Iran’s crude oil exports — have worked around the European Union embargo, suggesting imports will stay at least around these levels for the rest of the year.And here’s how these energy hungry Asian economies get around the ban by the U.S. and EU:
South Korea joined its Chinese counterparts by asking Iran to deliver crude on Iranian tankers, government and industry sources said. This shifts to Tehran the responsibility for insurance, sidestepping the EU ban.Very Few Compelling Price Drivers
Indian refiners have adopted a twin plan to deal with the insurance issue. They are seeking government approval to ask Tehran to deliver the oil, and are trying to use limited cover from state-run insurers for locally-owned tankers to ship it.
Growth in emerging economies in Asia, particularly China, has been the main driver of oil-demand growth in recent years. However, currently, there’s no such compelling story of strong demand and supply shortage that drove oil price to 2008 highs.
Near Term Market Movers
Although the supply and demand factors do not seem to support the current price levels in crude and gasoline, there are plenty of other events to sustain and add the risk/fear/speculation premium.
- The worse-than-forecast tropical storm Isaac is expected to strengthen to a Category 2 hurricane and hit the Gulf Coast at midweek disrupting refineries and offshore oil production. Crude and gasoline futures already partly reflected this risk premium. US gasoline prices could really spike is any of the refineries are off line.
- Petroleum Economist cited unnamed sources on Friday that IEA has agreed to a coordinated SPR (Strategic Petroleum Reserves) release with the U.S. in September. However, during the IEA coordinated SPR release last summer (due to Libyan civil war), oil price managed to climb back to where it was before the release in just eight days.
- Federal Reserves Chairman Bernanke’s often times market-moving speech at Jackson Hole meeting on Aug. 31.
- New bailout and stimulus package development from the Euro Zone and/or China.
- Geopolitics in the Middle East
Gas Price Remaining High When Oil Price Is Going Down
7:33 AM
Unknown
Gas Price Remaining High When Oil Price Is Going Down
Crude Oil and Commodity Prices
August, Monday 27 2012 - 10:04:26
|
| ||||||||||||||||||||||||||||||||||||
| Crude Oil Price by OIL-PRICE.NET © |
| ||||||||||||||||||||||||||||||||
1.45 1.51% Euro Crisis
Furthermore, another major reason is the safe haven buying of dollars because of concern over eurozone instability. There is naturally no sign that things will improve in the eurozone. In fact it seems as if things may only get worse, which in turn will serve to drive oil prices down even more. Greece is going to the polls in a few days, and with many Greeks believing that the decision to join the euro is the reason for the downfall of the Greek economy, one thing is sure, a large number will vote for one of the extremist parties. Even though we will not know the next chapter in Greece's tragic destiny until we know the results of the elections, conversely, if the Greek election results are interpreted as bad news by the markets, eurozone instability will increase. What's more, an exit of Greece from the Eurozone will have a disastrous effect on the markets and the resulting recession would expect oil prices to dive further.
US strategic petroleum
Logic would seem to dictate that if oil prices are going down, the price of gasoline should follow suit and go down also.
However the opposite has been observed lately. Of course as is the case in any fluctuation of oil prices, there is a range of reasons responsible for this.
So why exactly is the price of oil dropping whilst the price of gasoline at the pump is remaining high
The US also has the largest emergency oil supplies in the world. The release of oil from strategic petroleum reserves pushes prices down as the supply of oil is increased. In fact, even a statement to the effect that the government is considering the release of emergency oil supplies is enough to knock oil prices down. One only has to look at what happened in March 2012 when President Obama released a joint statement with the British Prime Minister David Cameron, announcing that both the UK and US were considering the release of emergency oil supplies. This alone was enough to have an immediate effect on oil prices and knock them down.
Gas Prices Affect Consumers
Although consumers are hoping that if the price of oil does continue to fall, the price at the pump will eventually go down, in reality the pricing of gasoline can fluctuate independently from that of crude oil. For once it is likely that retailers will continue to make the most of any dip in the oil market to protect profit margins until a recovery takes place.
Inflation and a weak dollar are also a major component in the domestic cost of production and distribution of gasoline. While crude oil prices depend extensively on geopolitical factors, the price of gasoline is more subject to domestic factors such as inflation.
Spain, which is the Eurozone's fourth largest economy has just had its rating downgraded by Fitch. On the 10th of June an emergency bail-out package of 100 billion euros was approved by a number of finance ministers from the European Union. Although precise details of the package have yet to be bashed out, the money will be used to finance the recapitalisation of Spanish banks. Spain is now the fourth country to be the recipient of a rescue package and this only serves to fuel concern over eurozone insecurity which has a knock down effect on oil prices.
Blame Iran, Really
Naturally world geopolitics also have an effect on the price of oil as well as price at the pump. As of July 1st, 2012 the European Union will stop buying oil from Iran. Until then the European Union will buy 20% of Iran's oil exports. This embargo is in response to Iran's nuclear weapons policy as it is intended to act as an incentive for Iran to come back to the negotiating table where its nuclear weapons policy is concerned. However many analysts have predicted that this embargo is likely to wreak havoc, as Iran has repeatedly stated its intention to shut down the Strait of Hormuz, should these sanctions are enforced. The Strait of Hormuz, extensively covered by oil-price.net occupies a key strategic position as it is at the entry to the Gulf and 20% of the world's oil passes through it. Many analysts including ourselves have predicted that if Iran does carry out these retaliatory measures the price of oil will begin to rise dramatically.
So what will happen over the next few months? Is the price of oil poised to rise or will it continue falling? The fact that Japan is ready to approve a bill which would give sovereign guarantees for Japan's tankers which load Iranian crude oil is an indicator that prices may continue to fall. If the Japanese bill is passed this will undermine the effectiveness of the sanctions which will come into effect on the 1 July, and thus increase the amount of oil on the market, leading to further declines in oil prices
Scenarios for and the gold price trends 2013
5:28 AM
Unknown
The overarching driver of the gold price for the year 2013 and beyond
will be the development of global financial crisis. The levels of debt
piled up by Western governments and often also corporate/private sectors
are still not sustainable. There is basically one scenario to get rid
of this burden: disciplined deleveraging, i.e. reduction of debts. The
alternative, which was pursued over the past years, is to create more
debt. This could eventually lead to inflation levels significantly above
the inflation rates we saw during the last decade in Western
currencies.
Either way, both a deleveraging, which will probably be long and
painful (‘the lost decade’), or a reduction of the real debt pressures
by means of higher inflation will potentially preserve gold as an
attractive insurance asset or store of value for many conservative
investors in 2013 and beyond. Geopolitical risks, e.g. in relation to
Iran, will support this position of gold as a ‘safe haven’ further.
Gold price forecasts 2013
For March 2012 analysts surveyed by Bloomberg end of 2011 forecasted a level of US dollars 1,950.- per ounce of gold.
The French Bank BNP Paribas estimated in December 2012 gold to
average US dollars 1,775 per ounce in 2012 and US dollars 2,150 per
ounce in 2013. On the other hand Thomson Reuters GFMS expects the peak
of the gold price for end of 2012 or beginning of 2013 and a following
decrease in the price of gold from 2013 on. The US-bank Morgan Stanley
forecasted a price of US dollars 1,550 for 2013. The CEO of the largest
US gold mining company Newmont Mining estimates that the price of gold
in 2013 may increase to US dollars 2,550.
In June 2012, Goldman Sachs updated its forecast on the gold price to
US$ 1,940.- within the following 12 months, i.e. by mid of 2013.
Barclays Capital expects a gold price of US$ 1,790.- in the fourth
quarter of 2012, while Morgan Stanley now predicts gold prices to be on a
level of US$ 2,000.- during that quarter.
Outlook on Gold 2013 and beyond
The diversity of analyst predictions with regard to the gold price in
2013 and the following years mirrors the uncertainties in the global
markets.
An interesting fact about gold is that it often performs well in
scenarios of deflation (for instance driven by global debt reductions)
but also in scenarios with higher than usual inflation rates (which
could potentially occur as public debt level increases further).
Gold therefore tends to perform positively in times of economic
uncertainties as well as in acute crises. Unfortunately, the global
financial problems are not yet sorted out. Some credible commentators
expect several more years of uncertainty and painful deleveraging, which
could end only when we are approaching the next decade.
A moderate allocation to gold will therefore in the foreseeable
future remain the imperative for many investors and could result in a
positive trend of the gold price 2013 and beyond. Portfolio
diversification, i.e. the spread of monies to different asset classes
and investments, should remain an imperative for safety-orientated
investors over the coming years.
Golds prices trends, forecast, and prospects 2013
5:13 AM
Unknown
Gold 2013 ??? the trend for the gold price in 2013 and beyond?
At the beginning of 2012 the gold price had increased on
an annual basis in each year for a decade. What is the forecast for the
gold price 2013 and beyond? Will the 10-year upwards trend of the gold
price continue in 2013?
A majority of gold investors views gold more as an insurance or store
of value than as a means of speculation. These investors therefore
regularly take a longer-term view on gold as an investment. What trend
of the gold price can we expect in 2013 and for the following years?
Gold price forecasts will never be completely accurate, but we collected
some information on the key drivers influencing the gold price and
analysts’ gold price forecasts for 2013.
Gold, the shining yellow metal has
proven to be a safe haven investment option for everyone not only
because of it being a hedge against inflation, but also due to gold
investments have historically shown a low correlation with investments
in other asset classes such as stocks or shares, mutual funds,
government and corporate bonds and even commodities and other precious
metals.
If we see history gold has provided
16.91 % annualized return over the past 10 years. In last 5 years since
2008 the gold prices have risen nearly 125% (Rs. 12500/- to Rs. 28000/-)
making a strong case for having it in your portfolio. The percentage
allocation to gold should depend on an investor’s risk and return
objectives.
Before talking about future return of
gold let us look at historical graph given below which shows gold has
given continuous appreciation over the decades.
This is because “As fewer and fewer
people have confidence in paper money as store of value, the price of
gold will continue to rise.”
You might have following question in your mind:-
Gold price forecast trend chart for 2011, 2012, 2013, 2014, 2015, 2016
The gold price forecast trend chart is as shown in the chart below for the years 2011 to 2016.
Do note that I have used one data point per year. That is the data is
the average price for the year. This allows me to carry out gold price
trend analysis with easy. You can can use once a month data but you will
have at least 120 points on your chart. If you would like to
place this chart on your website or blog or forum without any
modifications please copy and paste the contents of this file http://www.drpetersnews.com/goldlink.txt in your html code of your website
• Will the upwards trend of the gold price continue in 2013 and beyond?
• What we can expect from gold in 2013 and following years?
In this post we will address gold price
prospective 2013 and beyond. In order to forecast this we have collected
various data & information from various agencies. This forecast is
for giving you overview about future gold price we cannot assure that
this will be completely accurate.
Gold price trend 2013 and beyond:-
Trend in terms of supply & demand of Gold:-
Like all other commodity Gold price are also driven by basic rule of supply and demand. Demand of gold is categorized mostly in four sector i.e Reserve bank (central bank), jewelry, industrial & investment.
In most of country reserve bank is
adopting approach to buying gold continuously, we hope this trend will
be continue in 2013 and beyond.
Over the last decade jewelry demand
for gold decreased in relation to demand from other sectors, mainly the
investment sector. High gold prices and economic uncertainties will
likely keep gold demand from jewelry moderate in 2013.
Besides jewelry, we have seen major
boost of adopting gold as investment this may be due to availability of
various investment options like Gold ETF, Paper Gold etc. This
investment boost is likely to continue.
Industrial demand for gold in 2011 was 10% of total demand and due to higher price demand in this sector likely to get reduced.
In addition to demand side supply side
is also important for deciding trend. Gold production by mining reached a
new high in 2010 and is expected to increase by about 10% until 2013.
Trend in terms of Global Financial Situation:-
Other governing factor for gold price in 2013 and beyond will be global financial situation. Global financial situation is not so good today, level of debt taken by western countries are not sustainable. They are trying hard to improve financial situation either by taking more debt or by reducing current debts. Eventually this situation is causing significant rise in inflation rates & rise in value of western currencies.
Other governing factor for gold price in 2013 and beyond will be global financial situation. Global financial situation is not so good today, level of debt taken by western countries are not sustainable. They are trying hard to improve financial situation either by taking more debt or by reducing current debts. Eventually this situation is causing significant rise in inflation rates & rise in value of western currencies.
In the long run, the gold price has to
go up in relation to paper money, there is no other way. To what price,
that depends on the scale of the inflation – and we know that inflation
will continue.
Forecast by
|
Forecasted Gold Rate in Ounce
|
Converted Rate per
10 gm in Rs/- |
Year
|
BNP Paribas |
2280 $ | 38635 Rs/- | 2013 |
Thomson Reuters GFMS |
2000 $ | 33890 Rs/- | 2013 |
Morgan Stanley |
2175 $ | 36856 Rs/- | 2013 |
Newmont Mining |
2500 $ | 42363 Rs/- | 2013 |
Standard Chartered |
2000 $ | 33890 Rs/- | 2013 |
Standard Chartered |
2107 $ | 35703 Rs/- | 2014 |
Some forecast may seem to be speculations but one thing is for sure that from here gold price are intended to appreciate more. This may be due to economic uncertainties, unfortunately the global financial problems are not yet sorted out, you might have heard about bad financial situation about Europe and other western countries. This may cause gold price to rise further.
So, looking at global demand and other economic factors gold price will continue to rock in 2013 & beyond. Invest in gold today for brighter tomorrow.
Gold will set record high in future but when that time will only show us.
We will bring you the latest updates on the same as they happen. Stay tuned to Strategic Growth by following Strategic Growth Official Facebook Page and sign up for our free newsletter.
Subscribe to:
Posts (Atom)
