Category Archives: Oil

All Norwegians become crown millionaires, in oil saving landmark


The fund is a success in the sense that parliament has managed to put aside money for the future. There are many examples of countries that have not managed that
 
All Norwegians become crown millionaires, in oil saving landmark | Reuters

Morgan Stanley’s #Commodities Outlook – Business Insider


MORGAN STANLEY: This Is What The The World’s 14 Most Important Commodities Will Do

mauritius sugar cane
Sugar cane plantation in Mauritius

With the growing global population increasingly demanding goods, many financial advisors have advised clients to invest in commodities. Morgan Stanley’s commodities team led by Hussein Allidina favors soybeans, corn, and wheat as poor weather conditions slam supplies.
They also like precious metals, particularly gold and silver, as loose monetary policy sends investors seeking something with more stable value.  In fact, Morgan Stanley recently called the Federal Reserve’s latest action a game changer for the yellow metal.
What follows are Morgan Stanley’s opinions and price targets for 14 major commodities.


Brent oil continues to be affected by geopolitical tensions

Projected 2012 average: $110 /bbl
2013 price: $115 /bbl

Middle East unrest and and easy central bank monetary policies continue to support oil prices, though softer fundamentals heading into 4Q12 should weaken year-end crude prices. Risks are skewed to the upside for 2013.

Source: Morgan Stanley

Natural gas supplies will tighten by the end of the year, eventually sending prices higher

Natural gas supplies will tighten by the end of the year, eventually sending prices higher
Natural gas compressor station

Projected 2012 average: $2.74 /mmBtu
2013 price: $4.00 /mmBtu

Oversupply continues to weigh, but slowing gas-directed drilling may begin to help tighten balances by late 2012.
Source: Morgan Stanley

 

Aluminum prices will stay at low levels due to oversupply and too much production

Aluminum prices will stay at low levels due to oversupply and too much production
Sean Gallup/Getty Images
Projected 2012 average: $2,100 /MT
2013 price: $2,200 /MT
Very high global inventory and excessive production capacity will lead to up to two years of headwinds.
Source: Morgan Stanley

Copper prices will lead the industrial metals due to supply concerns

Projected 2012 average: $7,900 /MT
2013 price: $8,300 /MT
Supply difficulties will keep copper prices elevated — the global inventory pipeline remains soft.
Source: Morgan Stanley

Nickel supplies remain high, but price risk is to the upside

Nickel supplies remain high, but price risk is to the upside
Projected 2012 average: $17,800 /MT
2013 price: $18,300 /MT 
Supply risks from any new project delays and the impact of developments in Indonesia will keep the market primed for a price rally.
Source: Morgan Stanley

Zinc will continue to suffer from oversupply for several more quarters

Projected 2012 average: $2,000 /MT
2013 price: $2,100 /MT
Record-high inventories at the current rates of demand weigh on prices, but production is slowing. 
Source: Morgan Stanley

Gold is the best commodity to own right now

Projected 2012 average: $1,677 /oz
2013 price: $1,816 /oz
Interest rates, risk aversion and strong physical market fundamentals will serve as tailwinds.
Source: Morgan Stanley

Silver prices will be supported by the same forces fueling gold’s rally

Projected 2012 average: $32 /oz
2013 price: $35 /oz

Negative real interest rates will limit downside price risk.
Source: Morgan Stanley

Platinum lacks the safe-haven status of gold or silver

Projected 2012 average: $1,554 /oz
2013 price: $1,715 /oz
Platinum lacks safe haven status and has limited investment demand. Slowing global GDP and lower discretionary spending remain headwinds.
Source: Morgan Stanley

Commodity Red Flag…


Commodity Red Flag…

The MasterMetals Blog

>CBOE Futures Exchange: Trading Volume Tops One Million for First Time


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Thank you QE2!!!

Trading Volume Tops One Million Contracts for the First Time at CBOE Futures Exchange

http://etfdailynews.com/blog/2011/04/03/trading-volume-tops-one-million-contracts-for-the-first-time-at-cboe-futures-exchange/

April 4, 2011
The CBOE Futures Exchange, LLC (CFE) today announced that March 2011 was the most active trading month in CFE history as volume surpassed the one-million-contracts milestone for the first time ever.  The 1,066,367 contracts that changed hands during March was a new all-time high and the third consecutive record month at CFE, following the previous highs of 789,734 contracts in February and 778,157 contracts in January.  When including November 2010’s volume of 751,481 contracts, the four busiest months in CFE history have occurred during the last five months.  
March 2011 volume exceeded the 217,429 contracts traded in March 2010 by 390 percent.  March 2011 was the most active month of March on record at CFE and marked the eighteenth consecutive month in which total volume registered an increase when comparing year-over-year trading activity.
Average daily volume (ADV) of 46,363 contracts during March 2011, which was also a new record, topped the March 2010 ADV of 9,453 contracts by 390 percent.  When compared to 41,565 contracts per day during February 2011, which was the previous high, ADV in March rose 12 percent.  This was the second consecutive month in which CFE daily volume averaged over 40,000 contracts, a first for CFE.  
CBOE FUTURES EXCHANGE VOLUME SUMMARY
Current Month
Year-To-Date
March
2011
March
2010
%
Chg
Feb.
2011
%

Chg
March
2011
March
2010
%
Chg
Trad
-ing
Days
23 23 19 62 61
Total 
CFE
1,066,367 217,429 +390 789,734 +35 2,634,258 626,690 +320
Total 
CFE
ADV
46,363 9,453 +390 41,565 +12 42,488 10,274 +314
On Tuesday, March 15, Wednesday, March 16 and Friday, March 11, CFE experienced the three busiest single days in its history when 97,385, 97,254 and 77,619 contracts traded, respectively.  CFE also set back-to-back weekly volume records during the month: a total of 282,287 contracts traded March 7 through 11, which was then surpassed when a total of 334,692 contracts traded March 14 through 18.  Additionally, exchange open interest reached a new high of 210,495 contracts on Wednesday, March 16.    
Total trading volume for the first quarter of 2011 was 2,634,258 contracts, which now ranks as the busiest quarter in CFE history.  The trading volume during the first three months of 2011 surpassed the volume of 1,787,035 contracts during the previous quarter (4Q 2010) and the 626,690 contracts during the first three months of 2010 (1Q 2010) by 47 percent and 320 percent, respectively.  ADV during the quarter was 42,488 contracts, compared with 27,922 contracts in the fourth quarter of 2010 and the 10,274 contracts in the first quarter of 2010.  
March 2011 volume in VIX futures, based on the CBOE Volatility Index (ticker VX), totaled a new record of 1,065,374 contracts, exceeding the 216,800 contracts traded last March by 391 percent and the 788,908 contracts in February 2011, which was the previous high, by 35 percent.  March was the first month ever for VIX futures volume to surpass the one-million-contracts milestone.  
Average daily volume in VIX futures also reached a new high of 46,320 contracts during March.  This ADV surpassed the 9,426 contracts per day a year ago and topped the 41,521 contracts per day in February 2011 by 12 percent.  VIX futures experienced the top three most active single trading days in CFE history during the month:  97,337 contracts on Tuesday, March 15; 97,113 contracts on Wednesday, March 16; and 77,556 contracts on Friday, March 11.    
CFE currently offers futures on six different contracts, including: the CBOE Volatility Index (VIX), Weekly options on VIX futures (VOW), CBOE mini-VIX (VM), CBOE Gold ETF Volatility Index (GVZ), CBOE S&P 500 3-Month Variance (VT) and CBOE S&P 500 12-Month Variance (VA).  
On March 25, CFE launched security futures on the CBOE Gold ETF Volatility Index (GVZ), further expanding tradable CFE volatility products into a new asset class.  The calculation of the CBOE Gold ETF Volatility Index (“Gold VIX”) is based on the well-known CBOE VIX methodology applied to options on the SPDR Gold Trust (NYSE:GLD).  The Gold VIX is an up-to-the-minute market estimate of the expected 30-day volatility of GLD, calculated using real-time bid/ask quotes of GLD options that are listed on CBOE.  For more information on CBOE Gold ETF Volatility Index futures and options, see http://www.cboe.com/GVZ.
CFE, a wholly owned subsidiary of CBOE Holdings, Inc. (NASDAQ:CBOE), offers an all-electronic, open-access market model, with traders providing liquidity and making markets.  CFE trades are cleared by the AAA-rated Options Clearing Corporation (OCC). CBOE Futures Exchange is regulated by the Commodity Futures Trading Commission (CFTC).  
More information on CFE and its products, including contract specifications, can be found at: http://cfe.cboe.com/.  
CBOE®, Chicago Board Options Exchange®, CFE®, CBOE Volatility Index® and VIX® are registered trademarks, and CBOE Futures Exchange(SM) , GVZ(SM) and Weeklys(SM) are servicemarks of Chicago Board Options Exchange, Incorporated (CBOE).  Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services, LLC,. and have been licensed for use by CBOE.  
SOURCE CBOE Futures Exchange, LLC


>Venezuela No Longer to Certify Oil Export and Production Numbers


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21st century socialism at work.  From The Devil’s Excrement

Venezuela No Longer to Certify Oil Export and Production Numbers

March 30, 2011

Mas bien, Sin Rumbo

Just when Venezuela needs to send positive signals to world markets, as it intends to sell more and more debt internationally, the Venezuelan Government and PDVSA do exactly the opposite and decide to cancel the contract with the independent auditor Inspectorate that was hired two years ago to try to convince the world that Venezuela’s production and export numbers as reported by OPEC and the IEA are wrong. Both of these institutions have been reporting that Venezuela’s official oil numbers are significantly above those obtained by them from their independent analysis.

Neither PDVSA nor the Ministry of Energy and Oil gave much of an explanation for the cancellation of the contract. The auditing company is closing its offices in Venezuela.
What this will do is create further uncertainties in the country’s numbers which will not aid in reducing the so called credit risk of Venezuela at a time that the country needs to issue more and more debt. This means that issuance of the country’s debt will be more costly that the country’s numbers justify. Last week, Knight Securities suggested that the country’s handling of official news and statistics and the lack of a clear spokesman for the country on financial matters is making it more expensive for the country to issue debt. In a report entitled “The Monk’s exorcism boosts our faith in Venezuela” the company suggests it costs Venezuela 200 to 300 bps because of the way information is managed by Minister Giordani.
In the same report, PDVSA said that exports in February were 16% lower than those in January and this week international reserves at the Venezuelan Central Bank dropped to their lowest level since 2007, despite the Venezuelan oil basket averaging over US$ 100 per barrel last week.

Venezuela No Longer to Certify Oil Export and Production Numbers « The Devil’s Excrement

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>Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ


>Canadian Miners Don’t Love the London Stock Exchange
– Deal Journal – WSJ:
“By Phred Dvorak and Edward Welsch

When the London Stock Exchange Group Ltd. announced its proposed takeover of Toronto’s bourse, one of the supposed benefits was access–for Toronto-listed firms–to London’s deep pools of capital.

EPA/Adrian Bradshaw

That’s a topic dear to the hearts of roughly 1,500 cash-hungry start-up miners that populate the Toronto bourse and its venture affiliate. Those “junior miners”–and their constant need for money to drill, test and explore — have made the Toronto Stock Exchange, operated by TMX Group Inc., the mining-finance market of choice.

So what do those juniors think about the proposed deal? Not much, according to some of the attendees Deal Journal interviewed at the Prospectors & Developers Association of Canada conference in Toronto, the world’s largest gathering of small-cap miners.

Kerry Knoll, chairman of Canada Lithium Corp., with some $140 million in market cap, looked into listing on the LSE’s AIM market for smaller firms a few years ago and found it a much more expensive proposition than going public on the Toronto bourse. If London controlled the Toronto exchanges as well, the combined entity could raise the cost of listing in Canada, Knoll worries: “I would fear they’d bring that (higher-cost model) here and really put a crimp in our incubator.”

LSE and TMX executives selling the deal in recent weeks have said the Toronto exchange would remain Canadian-operated and regulated, and would benefit capital-seeking firms by offering truly global scale.

But David McPherson, president of Pure Nickel Inc., at some $14 million market cap, said he’d worry the interests of small, Canadian firms like his may get lost in a bigger exchange.

Pure Nickel raised money on the Toronto Venture Exchange, TSE’s junior market, in 2007 to buy land. It moved up to Toronto’s big board later that year. It’s already raised money from London institutional investors, but it doesn’t expect any additional U.K. retail-investment opportunities from a TSX-LSE combination.

“All I see is the risk that we could become insignificant in a much larger exchange,” he said.

But there are some fans, including Graham Downs, the CEO of ATAC Resources Ltd., market cap north of $600 million, thanks in part to a new discovery of gold in the Yukon.

“There’s a big resource component of the London Stock Exchange, but they are so focused on Africa and all these other places that they know,” Downs says. “They don’t have a lot of access to us, so I think it’ll open more pockets [of money] to Canadian ventures.”

Even though money may initially flow more toward London than Canada while the market finds its equilibrium, Downs says, in the end there will be a bigger pool of capital available to the best companies.

“If you’ve got good projects, if you’ve got a quality team, the money will find you,” he says.

Canadian Miners Don’t Love the London Stock Exchange – Deal Journal – WSJ

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>Openness can help lift the curse of resources


>Openness can help lift the curse of resources
By George Soros
FT.com

Published: March 3 2011 22:13 | Last updated: March 3 2011 22:13

The natural resources sector has the potential to generate billions of dollars in revenues that can be used for poverty reduction and sound investment. For decades, however, management secrecy has allowed corruption to thrive in countries such as Angola, Cambodia, and Guinea. According to Nigeria’s own corruption agency, up to $400bn of oil money has been stolen or wasted over the past 50 years. And in Libya, in particular, we now see a population rising against rulers whose control has been financed by the immense revenues they manage, and mismanage, in secret.

Ending this problem and letting new democracies flourish will, of course, not be easy. The resource curse undermines the investment climate, raises costs for companies, threatens energy and mineral security, and consigns millions of citizens in resource-rich countries to poverty. But evidence suggests that transparency in extractive industries can play an important role.

In 2002, I helped to launch the Publish What You Pay coalition, a global network of civil society organisations that has advocated for better management of oil, gas and mining revenues, and worked to ensure monies received are invested in schools, hospitals and poverty reduction. The coalition recruits oil companies, which then pledge to reveal what they pay to the governments and leaders of the states in which they operate, allowing them to be held accountable. In Liberia, this approach has seen moves towards new transparency standards, including openness on payments and contract terms – amazing progress in a country better known for former president Charles Taylor’s macabre violence and blood diamonds.

There are further positive signs from the Extractive Industries Transparency Initiative, an alliance to improve standards of transparency on a voluntary basis. Azerbaijan’s credit rating improved in part because it played a constructive role in the initiative. This week, after the first democratically held elections in its history, Guinea rejoined the initiative too, because its leaders know that with EITI membership comes a better investment climate.

Now, governments that regulate stock markets are going one necessary and long-awaited step further, in establishing mandatory listing rules. In July 2010, the US passed the Dodd-Frank Act, which requires all oil, mining and gas companies registered in the US to report payments to foreign governments, both by country and by project. Companies as diverse as PetroChina, BHP Billiton and BP will have to comply. Similarly, Hong Kong recently improved the disclosure of its companies’ payments as a condition of listing on its exchange.

The French and UK governments have also indicated support for new European oil and mining rules. EU revenue transparency legislation could build on US plans to move towards a new global transparency standard. The London Stock Exchange is one of the world’s most important financial markets, hosting more than £1,000bn worth of oil, gas and mining capital. It should follow others’ lead and change its rules too.

All of these measures hold great promise. Africa is the new frontier for investors in the natural resources sector, holding a 10th of the world’s oil reserves, 40 per cent of its gold and significant reserves of other minerals vital for modern industrial economies. The Middle East, meanwhile, could soon develop a string of prosperous democracies. Those promoting greater transparency in the natural resources industries are helping to reinforce powerful historical forces, which will unlock transformational sums of money to improve the lives of millions of people in some of the most fragile countries in the world.

The writer is chairman of Soros Fund Management LLC and founder of the Open Society Foundations

Copyright The Financial Times Limited 2011. 
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