Mereja

Author: OilPrice.com

  • New Japanese ETFs Having A Seismic Impact On The Commodities Market

    There has been some unusual action on the Japanese commodities markets that demands a comment.

    I mentioned earlier this week that over the last two weeks the Japanese have revved up several new structured investment products tracking commodities.

    There are now some “seismic signals” registering in those markets, showing these new ETFs and trusts may be having an immediate impact.

    On Tuesday, open interest in rubber futures on the Tokyo Commodity Exchange suddenly jumped 12% (touching off a flurry of prophylactic jokes from some of my coarser Asian colleagues).

    chart

    This is a large jump. In fact, I can’t remember the last time I saw a daily move of this magnitude on a major commodities exchange.

    Most interestingly, the majority of the buying came from trade and broker members of the TOCOM. These professional buyers usually account for a very small portion of TOCOM buying. The bulk of purchases almost always comes from non-commercial customers.

    Trade and broker members are generally sophisticated buyers. The kind who would be dealing in the structured products TOCOM recently introduced. The big jump in rubber could be a direct result of these new investment options.

    And rubber wasn’t a one-off. Yesterday, open interest in TOCOM gold futures jumped 8%. Again, a large portion of the buying came from trade members.

    chart

    One surprise is that trading in TOCOM platinum and palladium futures has been relatively subdued, despite the launch of new PGM-backed ETFs last week.

    But there’s been action in other parts of the world. NYMEX palladium futures had a wild week. Last Friday, NYMEX open interest in palladium jumped 2.7%. On Monday, it fell back 2.6%. Only to jump 4.4% on Tuesday and then fall 5.5% yesterday. On near-record volumes.

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    This is extreme volatility. And it may have to do with speculation that the new Japanese ETFs will increase global demand for platinum group metals.

    Something is certainly afoot. Keep an eye on this one.
    Here’s to rubber, gold and palladium,

    Dave Forest
    [email protected]
    www.piercepoints.com

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  • Crude Oil Hits Ceiling, As Hedge Funds Attack The Euro

    Crude oil broke through the $80 a barrel ceiling repeatedly during the week but kept falling back as hedge funds placed big bets on the Euro’s decline.

     

    The fiscal drama in Greece held global markets hostage much of the week as worries about the impact of the Greek crisis on the euro outweighed comments from Federal Reserve chairman Ben Bernanke about continued low interest rates in the U.S., pushing the euro down against the dollar and damping crude prices.

     

    The euro recovered some ground on Friday amid new reports of European aid for Greece after falling to a nine-month low of $1.3440 on Thursday. Germany’s state-owned bank KfW may take part in a planned Greek bond offering next week, according to market reports.

     

    The Wall Street Journal reported on Friday that a small group of elite hedge fund traders have concluded that the euro could be headed to parity with the dollar and their bearish bets are increasing the downward pressure on the 16-nation currency.

     

    The Journal compared the situation to the hedge fund attack on the dollar in 2008. However, the trades are not expected to lead to a collapse of the currency as the attacks of George Soros on the British pound did in 1992, the paper said.

     

    Positive U.S. economic data on Friday, including a revised fourth-quarter GDP annual growth rate of 5.9%, help crude oil futures claw back some of Thursday’s losses and near the $80 threshold again. Nymex’s benchmark West Texas Intermediate settled at $79.66 on Friday, after topping $80 earlier in the week.

     

    In spite of crude’s difficulties in staying above $80, some analysts issued bullish prognoses for energy futures. Goldman Sachs forecast a new trading range of $85 to $95, up from the $70 to $80 of the past several months, amid supply disruptions from the North Sea and Venezuela and the impact of the Total refinery strike, which was resolved earlier this week.

     

    Other analysts, too, looked for fundamental supply and demand considerations to reassert themselves amid the currency turmoil and lift crude oil futures into a higher trading range. Oil futures prices gained more than 9% in February but remained below January’s highs.

    By Darrell Delamaide of OilPrice.com who focus on, Fossil Fuels Metals, Crude Oil Prices and Geopolitics To find out more visit their website at: http://www.oilprice.com

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  • 60-Second Recap Of This Week’s Oil Market

    oilpriceAn easing of the crisis in Europe gave energy markets a firm tone last week that enabled crude oil futures to gain nearly 8% amid mixed economic news and some concerns about supply.

     

    A strike at French oil refineries lifted prices to a five-week high Friday, with the benchmark West Texas Intermediate finishing the week at $79.81. The French strike threatened to limit U.S. imports of refined products from Europe.

     

    Earlier in the week, the show of solidarity by European Union governments regarding fiscal problems in Greece and other countries in the eurozone, eased concerns about the crisis there and downward pressure on the euro.

     

    A move Thursday by the Federal Reserve to raise the discount rate – the rate it charges banks for emergency loans – did however propel the dollar higher against the euro. News on Friday that the core inflation rate in the U.S. actually fell 0.1% in January – the first decline since 1982 – dispelled worries that the Fed would need to tighten further interest rates to combat inflation and led to a lower dollar on Friday.

     

    The weak consumer price index and another weekly increase in jobless claims provided further evidence that U.S. economic recovery continues to be weak.

     

    The weekly report on oil inventories, coming a day late because of the Monday holiday in the U.S., showed increases in crude oil and gasoline stocks but a bigger-than-expected drop in distillates, which includes heating oil. This news buoyed crude oil prices.

     

    A coup in African oil producer Niger on Thursday added to some supply concerns at the end of the week to support higher crude oil prices.

     

    Hedge funds and other speculative traders sharply increased their net long positions in crude oil futures in the week ending Feb. 16, according to trading data from the Commodity Futures Trading Commission, after having reduced them in the previous week.

     

    Andrew Hall, the head of Phibro, is seeking new investors as he reorganizes his hedge fund operations in the wake of Phibro’s move from Citigroup to Occidental Petroleum. Hall, who specializes in energy trading, will manage the new Astenbeck Capital Management, named after a town in Germany where he owns a castle. According to the Financial Times, Astenbeck will take over management of two oil funds previously operating under Phibro’s aegis.

     

    Hall was the energy trader who created a controversy while still working for Citi because of his $100 million bonus. The bonus was deemed politically unacceptable while the bank was receiving a taxpayer bailout and led to Citi selling Phibro to Oxy Pete.

     

    Source: http://www.oilprice.com/article-oil-prices-rise-amid-mixed-economic-data-as-euro-concerns-ebb.html

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