Speculators Dumped Crop Wagers Before Biggest Rally: Commodities (Source: Bloomberg)
Speculators slashed wagers on higher agricultural prices by the most in eight weeks, missing out on this year’s biggest rally as parched fields from South America to Europe curbed expectations for record harvests. Money managers trimmed positions across 11 U.S. farm goods by 2.5 percent to 661,067 futures and options in the week ended March 13, Commodity Futures Trading Commission data show, the biggest reduction since Jan. 17. Bets on sugar fell the most since November before prices posted their biggest weekly gain in five months. Funds also became more bearish on wheat, which jumped to its highest in almost two weeks.
The Standard & Poor’s GSCI Agriculture Spot Index (SPGSAG) rose 3.5 percent last week, the most since December, as drought damaged soy, corn and sugar crops across Brazil and Argentina and slowed wheat shipments from eastern Europe and Russia. World food costs had dropped about 11 percent from a record in the past year on prospects for the most grain supply ever, before rallying in January and February, United Nations data show. “There are some issues with crop production,” said Jeffrey Sherman, who helps manage about $30 billion of assets for DoubleLine Capital in Los Angeles. “The weather is very, very dry in the southern hemisphere. The opportunity now is in agriculture.”
MF Global Trustee Seeks More Payments (Source: CME)
The trustee overseeing the liquidation of MF Global Holdings Ltd.'s brokerage Thursday proposed additional payments to commodities clients of the failed broker-dealer, including the first to those with accounts frozen on non-U.S. exchanges. The trustee asked the bankruptcy judge overseeing MF Global to approve a further distribution of up to $685 million, adding about 10 cents on the dollar to the 72 cents already recovered by U.S. customers who held funds on deposit. James Giddens, the trustee unwinding MF Global's U.S. brokerage business, has recovered about $5.3 billion of the $5.5 billion to $6 billion in U.S. customers' segregated funds held at the brokerage. To date, he has returned about $3.9 billion to customers via a series of bulk transfers arranged by CME Group Inc. in the weeks following MF Global's demise last year.
The latest request includes around $600 million held as segregated assets for clients trading on U.S. exchanges and another $50 million to so-called 30.7 customers related to U.S. customers trading overseas. An additional $35 million of customer property is earmarked to a domestic delivery class, which Giddens identified as physical customer property that has been or will be reduced to cash. "As the estate has continued to mature, the trustee made a determination that an additional distribution was warranted," said Giddens's spokesman, Kent Jarrell. The approximately $700 million in additional distributions will cut in half the $1.4 billion reserve Giddens initially had set aside for U.S. commodities customers. The trustee is required to maintain funds in reserve because a number of MF Global overseas customers--including those in U.K. and Hong Kong--could have valid claims against the U.S. brokerage.
Indeed, KPMG, which is MF Global's U.K. insolvency administrator, have filed some $257 million in claims against the U.S. estate related to foreign commodities customers' positions and another $92.5 million involving foreign-exchange transactions. Although those affiliate claims have been lumped in with the estimated $5.5 billion to $6 billion MF Global was to have segregated for U.S. customers, no distribution has been made. "We haven't paid U.K. entity a penny," Jarrell said. Representatives for MF Global's U.K. insolvency administrator and the Chapter 11 trustee declined to comment. An estimated $1.6 billion in client assets remain out of reach, with some money missing and other funds held up by proceedings in other countries.
"If [the trustee] doesn't recover anymore, the shortfall is probably going to be right in the range of the high 80s or perhaps the low 90s [in cents on the dollar], in terms of recovery," said Vince Lazar, a partner with law firm Jenner & Block, which is representing CME in the bankruptcy proceedings. Lazar was speaking Wednesday at a futures industry conference in Florida. In all, about 25,000 commodities customers have filed claims with the trustee. The unaccounted-for funds include $900 million linked to U.S. commodity-trading accounts as well $700 million tied to foreign-based accounts, believed to be in the U.K. Distressed investors have been offering some MF Global U.S. customers up to 90 cents on the dollar for their so-called 4d claims, betting Giddens can boost their recoveries by clawing back assets from MF Global's U.K. estate and others while fending off claims from his rivals, which include MF Global's U.K. administrators and the holding company's Chapter 11 trustee, Louis Freeh.
Still, Giddens faces serious challenges in getting back the remaining funds. Although he recently said he traced a majority of the transactions made by MF Global during its final week in October, he noted recovering the cash could prove difficult and will take time. MF Global collapsed Oct. 31, 2011, revealing the gap in client money the firm was supposed to have safeguarded under U.S. commodity-market law. Regulators and investigators have yet to provide a full explanation for the shortfall or where the money wound up. Giddens is winding down MF Global's broker-dealer business under the authority of the Securities Investor Protection Act, which governs the liquidation of failed brokerage firms.
CFTC Targets Rapid Trades (Source: CME)
A top U.S. regulator said his agency plans to widen day-to-day monitoring of the commodities and futures markets, targeting the high-speed trading firms that are a growing force. Instead of just policing completed futures trades, the Commodity Futures Trading Commission will seek to watch the fleeting buy and sell orders that increasingly influence the market, CFTC Chairman Gary Gensler said in an interview. The move follows a Securities and Exchange Commission plan to sharpen oversight of stock trades following the 2010 "flash crash." Regulators are seeking to catch up with high-frequency trading firms that are responsible for roughly half of orders, the vast majority of which are never executed. The SEC is probing the close relationship between high-speed firms and the computerized exchanges they do business with. Regulators are ramping up oversight of high-frequency trading, which some fear could disrupt or distort financial markets with aggressive, rapid-fire trading strategies.
Some more traditional institutional trading firms worry uncompleted orders are sometimes used to manipulate markets by making it appear there is more interest in buying or selling a contract than there is in reality. The futures regulator expects to acquire and implement a computer system soon that can download and track all orders, including those that aren't executed, although not in real time, Gensler said during the interview, at a futures-industry conference here. The shift is in part due to new technology and software that can store and sift through the huge daily downloads of data, he said. The SEC's initial plan to track trades in real time was estimated to cost billions of dollars, but neither the SEC nor the CFTC have provided cost estimates for the systems they are currently planning. The new tracking systems, which aren't expected to be implemented this year, will "give us a more detailed view of who owns and controls accounts," he said.
The CFTC will ask the financial industry this spring or summer about how the agency should approach regulating automated trading. The CFTC is preparing for a major change in the trading of derivatives contracts mandated by the Dodd-Frank financial-overhaul law. Currently, most trading of derivatives contracts takes place over phones between human traders. Certain provisions of Dodd-Frank mandate that some derivatives trade on exchanges, but the exact rules and timing haven't been determined yet. Some high-speed firms welcome the increased scrutiny. "We all depend on having market integrity," said Richard Gorelick, chief executive of RGM Advisors, an Austin, Texas, high-frequency trading operation. "We all need to know that the rules are fair and that they're enforced accordingly."
An estimated 80 to 90 orders are put into futures markets for every trade that actually happens, according to Gensler, and experts say about 90% of all orders on stock exchanges are canceled. The SEC is weighing whether to put a fee on orders that high-speed firms place and later cancel. For now, the CFTC doesn't have a cancellation fee, but a new group in the commission will consider the issue, which many exchanges and high-frequency firms oppose. Some futures exchanges are already moving to curb excessive orders. IntercontinentalExchange Inc. (ICE), where benchmark contracts for cotton and sugar and a prominent U.S. dollar index are traded, said in late February that a policy it implemented last year is having success at curtailing what the exchange called "inefficient and excessive" bids and offers.
ICE penalizes traders who submit orders far off the market price--a tactic that can be used by high-frequency traders and others to give other market participants the impression prices are poised to change rapidly. Meanwhile, the CFTC plans to hold the first meeting of a high-frequency trading advisory panel on March 29. High-frequency trading is "taking an even larger role in our market, a bigger impact," said Scott O'Malia, the CFTC commissioner who is spearheading the push. "You can't ignore a trading style that occupies 40% of our market on any given day," he said. About 50 to 60 trading firms and exchanges have applied for membership with the roughly 25-member high-frequency subcommittee, including CME Group Inc. (CME), which operates the largest futures exchange in the U.S. O'Malia said a decision about who would make up the subcommittee hadn't yet been made. The subcommittee will weigh a definition of high-frequency trading to better regulate it, among other matters.
It also will probe the relationships between futures markets and the stock market. On May 6, 2010, massive sales of futures contracts tied to stocks helped trigger the flash crash, the SEC said in a report.
Corn (Source: CME)
US corn futures end higher, supported by optimism about Chinese demand. Chinese corn prices set a record high overnight, fueling hopes the country will import US product. More support comes from follow-through buying, building on gains from Thursday and recent weeks as traders hesitate to bet against the upward trend before a weekend. Tight near-term supplies also lend support. Already-tight cash markets were firmer in areas including the eastern corn belt and southeastern feed markets, says Tregg Cronin, market analyst at Country Hedging. CBOT May corn ends up 4c or 0.6% at $6.73 a bushel.
Wheat (Source: CME)
US wheat futures end higher, boosted by a rise in corn prices and by concerns that the U.S. winter wheat crop coming out of dormancy early due to warm weather will need proper weather conditions. Risks could come from frost damage if temperatures cool or from insufficient moisture. Trading is choppy and possibly marked by short-covering. CBOT May wheat rises 7 1/4c or 1.1% to $6.72 a bushel, while KCBT May wheat rises 1c to $7.05 1/2 and MGEX May wheat rises 2 1/2c to $8.22 3/4.
Rice (Source: CME)
US rice futures settle at a one-month high. Rice futures advanced for the second straight day, fueled by a pickup in export sales and reduced acreage expectations for the coming year, analysts say. Strength in other grains and oilseeds were also as a reason to buy, analysts add. CBOT May rice ended up 21 1/2c at $14.53 1/2/hundredweight.
U.S. corn bears smell blood in Sept future
-- Gavin Maguire is a Reuters market analyst. The views expressed are his own. --
CHICAGO, March 16 (Reuters) - Spring-like conditions across the U.S. Midwest have raised expectations for an early corn planting season in 2012, which in turn should lead to an earlier harvest than usual in the fall.
While the December contract still officially represents the 'new crop' expected at harvest, should farmers be able to crank up corn plantings over the coming weeks a large amount of fresh grain supplies should become available by September, making that contract month the more likely candidate for pronounced downside pressure in the fall.
US soy at 6-month top, China's corn hits record-high
SINGAPORE, March 16 (Reuters) - Chicago soybeans climbed to a six-month top rising for a fourth straight session with support from better-than-expected U.S. exports on strong Chinese demand and lower supplies from drought-hit South America.
"Soybeans have firmed as China has been importing quite a lot and there have been some concerns that demand for soybeans could switch acreage from corn," said Lynette Tan, an analyst with Phillip Futures in Singapore.
Warm U.S. winter could spur corn, tree-killing beetles
WASHINGTON, March 15 (Reuters) - As much of the United States basks in summer-like temperatures, weather and climate experts said this year's warm winter could mean early corn planting, a risk of killing frost for apricots and a baby boom for tree-chomping bark beetles in the West.
The winter of 2011-12 was the fourth-warmest in the 117-year record, according to the National Oceanic and Atmospheric Administration, which uses meteorological winter, which ended on Feb. 29. Astronomical winter runs until early March 20, when spring arrives at 1:14 a.m. EDT.
US flood risk low but droughts could continue-NOAA
March 15 (Reuters) - No area of the United States faces a high risk of major flooding this spring for the first time in four years, but continuing drought across the southern and western parts of the country could lead to wildfires, U.S. government forecasters said on Thursday.
The National Oceanic and Atmospheric Administration said in its spring outlook that low winter precipitation means few parts of the United States face above-normal flood risks.
EU wheat exports to grow only little by 2017-analyst
PARIS, March 15 (Reuters) - European Union wheat exports will benefit little from rising world demand over the next five years, with EU shipments to be curbed by growing use of cereals in biofuels, limited production gains and competition from Black Sea exporters, an analyst said.
Soft wheat output in the 27-country EU could rise by 5 million tonnes by 2017, Strategie Grains said in a presentation on Thursday, arguing growth would be capped by demand for arable land for oilseeds and declining yield gains for wheat in western countries like France.
Kazakhstan sees booming grain exports, new terminal
AKTAU, Kazakhstan, March 15 (Reuters) - Kazakhstan, a top-10 world wheat exporter, still hopes to export around 15 million tonnes of grain in the current marketing year and plans to build a new terminal on the Caspian to boost exports by sea, officials said on Thursday.
A giant steppe nation five times the size of France and with a population of just 16.7 million, Kazakhstan more than doubled its grain harvest to 27 million tonnes last year, its biggest since independence in 1991.
India cold seen delaying wheat harvesting in key areas
CHANDIGARH, India, March 15 (Reuters) - Prolonged winter weather and recent rainfall may delay wheat harvesting by at least a week in India's key grain producing northern states of Punjab and Haryana, officials and farmers said on Thursday.
Harvesting in Punjab and Haryana, the country's recond and third biggest producers of wheat, usually begins from April 1 in normal weather conditions.
Vietnam may take top rice exporter title from Thailand
HANOI, March 15 (Reuters) - Vietnam may snatch the title of world's top rice exporter from Thailand this year, saying it aims to match last year's record shipments of 7.2 million tonnes helped by strong demand and a positive outlook for domestic production.
In contrast, Thailand, which has been the world's biggest exporter for three decades, looks set to see exports fall sharply to 7 million tonnes at most due to high prices caused by government intervention to support millions of poor farmers.
Mexico Sees El Nino Bringing Drought Relief (Source: CME)
Mexico is expecting El Nino to bring much-needed rains to various agricultural parts of the country in the near future, providing relief from prolonged widespread drought, the country's Agriculture Minister Francisco Mayorga said Thursday. "We don't know exactly how much or when, but La Nina will pass and that will help improve the situation," he said, noting that weather typical of El Nino is already replacing La Nina climate conditions in some agricultural areas of t he country. La Nina has caused unusually dry weather throughout the country's territory over the past year, leading to the deaths of thousands of livestock and more than a million hectares of crops, especially grains. Mayorga said rainfall in some of the worst-affected states last month in combination with federal resources has already helped productivity return to its normal pace in some areas.
"Production is being re-established," he said, adding that producers with irrigation in northern Mexico have ramped up the production of pasture, used for livestock feed, to offset losses. Mayorga said the fall-winter harvest is expected to yield 30% more corn, and as a result imports of white corn, which reached an unusually high level last year of 1.4 million tons, are expected to drop to 1 million tons.
Corn, Soybeans Rally to Six-Month Highs as China Demand Outlook (Source: Bloomberg)
Corn and soybeans extended rallies to the highest prices since September on speculation that China may boost purchases from the U.S., the biggest producer of both crops. Jilin Corn Center Wholesale Market reported yesterday that government purchases of domestic grain have plunged this year to 1.2 million metric tons from 11 million a year earlier, a sign of tighter supplies in China that will lead to a jump in imports. On the Dalian Commodity Exchange, corn futures jumped to a record today. Soybean imports may rise more than 20 percent in the first half of 2012, Grain.gov.cn said March 12. “The rising markets are a reflection of traders expecting increased Chinese purchases from the U.S.,” Jerry Gidel, the chief feed analyst at Chicago-based Rice Dairy LLC, said in a telephone interview. “Rising meat demand is driving Chinese consumption of feed.”
Corn futures for May delivery rose 0.6 percent to close at $6.73 a bushel at 1:15 p.m. in Chicago, after touching $6.7375, the highest price since Sept. 22. The grain rallied 4.3 percent this week, the largest gain since the end of January.
Wheat, Corn, Soybean Futures Rally on Chicago Board of Trade (Source: Bloomberg)
Wheat, corn and soybean futures rallied on the Chicago Board of Trade. Wheat futures for May delivery advanced 0.7 percent to $6.695 a bushel at 9:45 a.m. in Chicago, after touching $6.73, the highest since March 5. Corn futures for May delivery rose 0.4 percent to $6.715 a bushel on the CBOT, heading for the biggest weekly gain since January. Earlier, the contract touched $6.7375, the highest since Sept. 22. Soybean futures for May delivery gained 0.2 percent to $13.7175 a bushel in Chicago, after touching $13.775, the highest since Sept. 15.
U.S. Corn, Wheat Planting to Rise, Soy Will Fall, Allendale Says (Source: Bloomberg)
U.S. farmers will plant more corn and fewer acres of soybeans than the government forecast last month, according to a survey of growers by Allendale Inc. Wheat planting will rise for a second consecutive year, it said. Farmers indicated they will sow 95.012 million acres with corn, Allendale said today in an e-mailed release. That’s up from last year’s 91.921 million acres and above the 94 million that the U.S. Department of Agriculture forecast on Feb. 24. Soybean plantings will slip to 74.495 million acres from 74.976 million last year, according to Allendale’s 23rd annual survey of farmers. The USDA said last month that 75 million acres would be sown this year. The combined area planted with all wheat varieties will rise to 56.609 million acres, according to the survey by Allendale, a farm-market adviser and brokerage based in McHenry, Illinois. Last month, the USDA said farmers would sow 58 million acres.
Wheat Drops as Canada Output May Increase; Soybeans Fall (Source: Bloomberg)
Wheat futures fell on speculation that Canada will boost output amid rising stockpiles that are expected to reach the highest in 12 years. Soybeans also fell. Canadian farmers will plant 10 percent more wheat this year, Agriculture & Agri-Food Canada said yesterday. The area seeded with the grain will rise to 7.84 million hectares (19.4 million acres) and total production may rise 3.3 percent, the government said. Global stockpiles may reach 209.6 million metric tons this year, the highest since 2000, U.S. government data show. “The only commodity that could be challenged this year is wheat with its important surplus,” said Jonathan Bouchet, a trader at Boman Capital SA in Geneva. “Weather issues in South America might push the grain complex to the upside for some weeks,” with wheat being the laggard, he said.
Wheat for May delivery declined 0.5 percent to $6.615 a bushel by 10:07 a.m. London time after yesterday surging as much as 3.7 percent. Futures are set for a 2.9 percent gain this week. Milling wheat on NYSE Liffe in Paris gained 0.6 percent to 215.50 euros ($281.30) a metric ton.
Flood Risks Drop But US Drought To Persist (Source: CME)
Most of the continental U.S. is at little risk of flooding this spring, while the southern part of the country is expected to remain mired in drought, the National Oceanic and Atmospheric Administration said Thursday. "We're not forecasting a repeat of recent historic and prolonged flooding in the central and northern U.S., and that is a relief," said Laura Furgione, deputy director of NOAA's National Weather Service. "The severity of any flooding this year will be driven by rainfall more so than the melting of the current snowpack." Extreme flooding from heavy snowfall last winter delayed plantings of crops from corn to sugarbeets across the Midwestern U.S., sending prices higher. A drier spring would be a relief for farmers, particularly in the northern Great Plains, after they endured widespread flooding last year that kept them from sowing hundreds of thousands of acres of farmland. But the federal forecast is bittersweet for other U.S. farmers who are gearing up for planting season.
Although it isn't expected to be as severe as last year, drought in the southern U.S. will likely continue through the end of June and could spread, NOAA said. "Recent rainfall has helped lessen the drought in eastern Oklahoma, northeast Texas and interior Louisiana, but the historic magnitude of this prolonged drought means that recovery will be slow," said David Brown, director of NOAA's Southern Region Climate Services. "Drought is now encompassing parts of the West and Southwest, making conditions more favorable for wildfires." The dry weather could hurt cotton production. The U.S. Department of Agriculture already is forecasting a 13% decline in output in the year ending July 31, at 15.7 million bales. Drought likely will continue in West Texas and Georgia, which together produce more than one-third of U.S. cotton. Drought last year ravaged cotton production in Texas, which produced its smallest crop since 1998.
If the drought continues, it is bullish for cotton futures, said Andy Ryan, a senior analyst at INTL FCStone. The new "crop's going to be planted April, May, June." Cotton futures are down about 4% since the start of the year because of concerns about a glut of supply on slow demand. The parched conditions in the southern Plains over the last 18 months also have forced ranchers in states like Texas and Oklahoma to liquidate hundreds of thousands of beef cattle. The enduring drought conditions continue to delay any efforts to rebuild herds, a process that likely will take at least three years, if not longer. Nearly 70% of Texas--the largest cattle-producing state in the nation--remains in severe drought or worse, according to federal data. NOAA said the southwest is at risk for wildfires.
Iran food stockpiling grows as grain ships near port
LONDON/HAMBURG, March 15 (Reuters) - Vessels carrying at least 360,000 tonnes of grain are lined up to unload in Iran, Reuters shipping data showed on Thursday, a sign that Tehran is succeeding in stockpiling food to blunt the impact of tougher Western sanctions.
Iran has been shopping for wheat at a frantic pace, ordering a large part of its expected yearly requirement in a little over one month and paying a premium in non-dollar currencies to work around toughened Western sanctions and avoid social unrest.
Indonesia may decide on rice imports by June -Bulog
JAKARTA, March 15 (Reuters) - Indonesia should decide on how much rice it will import by June, as that is when the government will have a clear idea about the size of the domestic crop, the head of the state rice procurement agency Bulog said on Thursday.
Last year, Southeast Asia's largest economy imported 1.9 million tonnes of rice from Thailand, Vietnam and India, to ensure it had plentiful stocks of the staple food, and to avoid stoking food inflation.
Brazil new CS sugar output seen up 9 pct - Datagro
SAO PAULO, March 15 (Reuters) - Sugar output from Brazil's new 2012/13 center-south cane crop was forecast at 33.88 million tonnes, up 9 percent from 31.2 million tonnes in the current crop, crop analysts Datagro said on Thursday in their first estimate of the upcoming harvest.
Datagro President Plinio Nastari said Brazil's main growing region will produce 518.3 million tonnes of cane this coming April-March season, up from the 493 million tonnes crushed from this season's drought-hit center-south crop.
Rwanda sees coffee harvest up 50 pct in 2012
KIGALI, March 15 (Reuters) - Rwanda's coffee output could rise by 50 percent this year due to a bumper harvest after good rains late last year, and the small but fertile central African country is eyeing newer outlets for its high quality, speciality coffee.
Rwanda, a much smaller producer compared to its neighbour and Africa's top exporter Uganda, grows high quality, Arabica coffee beans much of which is exported mainly to the United States, Europe, Japan and South Korea.
Brazil 2012-13 Sugarcane Crop Seen At 518M Tons (Source: CME)
Brazil's key center-south region will likely see a modest recovery in its sugarcane crop during the coming 2012-13 season, as last year's problems related to pests, frost and flowering aren't expected to occur, sugar and ethanol consultancy Datagro said Thursday. The region, which produces nearly 90% of Brazil's sugarcane, should crush 518.3 million metric tons of the crop during the harvest that starts in April and runs through November. That forecast represents an increase of about 5.1% from the previous year. While the sector's main structural problem--insufficient renewal of sugarcane fields in recent years--remains largely unresolved, there's plenty of room for improvement over last year's disappointing sugarcane crop, Datagro President Plinio Nastari said in a press conference. In 2011, center-south sugarcane output fell for the first time in a decade amid a high incidence of pests, a series of rare winter frosts that damaged fields, and widespread flowering that reduced plants' sugar content.
"Everything indicates that flowering won't occur this year," Nastari said, noting the phenomenon is triggered by weather conditions early in the year. Datagro expects mills in center-south Brazil to churn out 33.88 million tons of sugar in the 2012-13 season, up 8.6% year-over-year. Production of ethanol fuel is seen rising 5.9% to 21.8 billion liters. Datagro expects northern and northeastern Brazil to post similar numbers to its 2011-12 crop, crushing 68 million tons of sugarcane. Mills in that region are expected to produce 4.9 million tons of sugar and 2.15 billion liters of ethanol fuel. Nastari said Brazil as a whole should export 26.35 million tons of sugar and 1.8 billion liters of ethanol fuel in 2012-13.
Oil Rises a Second Day in New York Trading; Brent Little Changed (Source: Bloomberg)
Oil for April delivery rose as much as 42 cents, or 0.4 percent, to $107.48 a barrel in electronic trading on the New York Mercantile Exchange. It was at $107.47 at 12:16 p.m. Sydney time. The contract, which expires tomorrow, climbed 1.9 percent to $107.06 a barrel on March 16, the highest close since March 9. The more active May future rose 37 cents today to $107.95 a barrel. Brent oil for May settlement was at $126 a barrel, up 19 cents, on the London-based ICE Futures Europe exchange.
Obama nears dropping IEA fig leaf for oil release
(Robert Campbell is a Reuters market analyst. The views expressed are his own)
NEW YORK, March 15 (Reuters) - U.S. President Barack Obama, itching to pull the trigger on a fresh release from the strategic oil reserves to quell surging fuel prices, is getting closer to plunging into the market without backup from other Western nations.
Opposition to a fresh use of strategic oil stocks has come from European members of the International Energy Agency, threatening to slow any stock release.
Brent crude rebounds above $123 on Iran-West tensions
SINGAPORE, March 16 (Reuters) - Brent crude rebounded above $123 after a sharp sell-off in the previous session, as rising tensions between Iran and the West fuelled an oil rally that has forced Western leaders to prepare a release of their strategic oil reserves.
"We think that prices probably will continue to grind higher as we get closer to the sanctions deadline," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong
Italy auto fuel demand dropped sharply in Feb
MILAN, March 15 (Reuters) - Consumption of refined oil products in Italy dropped 10.7 percent in February to 5.1 million tonnes, the sharpest fall since April 2009, driven by plunging demand for auto fuel and new cars, industry group Unione Petrolifera (UP) said.
Petrol consumption fell 20.3 percent year-on-year to 558,000 tonnes last month, while diesel for road vehicles dropped 15 percent to 1.71 million tonnes, UP said in a statement on Thursday.
U.S., UK set to agree emergency oil stocks release
LONDON, March 15 (Reuters) - Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months, two British sources said, in a bid to prevent fuel prices choking economic growth in a U.S. election year.
A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected "shortly" following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said.
China eyes tech breakthoughs, increased shale gas output
BEIJING, March 16 (Reuters) - China hopes to make breakthroughs in shale gas technologies in coming years to support large scale production later this decade, as it strives for a higher share of gas consumption in China's energy mix.
The country aims produce 6.5 billion cubic metres of shale gas by 2015, or roughly 6 percent of China's current total gas production, but it intends to dramatically boost output to 60 to 100 bcm in 2020, the National Energy Administration (NEA) said on Friday.
Gold and Silver Futures Advance, Rebounding From Weekly Decline (Source: Bloomberg)
Gold for April delivery climbed as much as 0.3 percent to $1,660 an ounce on the Comex in New York, and traded at $1,659.40 an ounce by 6:02 a.m. Singapore time. The metal dropped 3.3 percent last week. Cash metal was little changed at $1,659.40 an ounce. May-delivery silver was little changed at $32.565 an ounce, after declining 4.7 percent last week, the worst weekly performance this year. Spot metal was also little changed at $32.56 an ounce.
India Raises Gold-Import Tax for Second Time; Prices Drop (Source: Bloomberg)
India, the world’s biggest bullion buyer, increased the tax on gold imports for the second time this year after record purchases widened the current-account deficit. Gold fell. The government will tax gold bars and coins and platinum at 4 percent, Pranab Mukherjee, finance minister, said in his budget speech for the year starting April 1. That’s up from 2 percent set in January. There was no change on the silver tax. India doubled the tax on gold and silver on Jan. 17 by imposing a levy on imports as a percentage of the price, compared with the previous system of tax by weight. Global bullion prices rallied for an 11th year in 2011 as purchases by India peaked at 969 metric tons. Futures in India gained 32 percent last year, exceeding the 10 percent advance in global prices, as the currency slumped to a record low.
“The Indian market will wait for lower prices and there is also the risk that this duty hike will lead to increased smuggling,” Edel Tully, an analyst at UBS AG in London, said by e-mail today, in response to questions from Bloomberg News. “Today’s duty increase will dampen Indian demand.”
