Gold retreats from 7 week top as dollar bounces back

Posted by Forexsq 119 days ago (

Gold edged lower on Tuesday as the dollar recovered and European shares rose, but uncertainty about the timing of a U.S. interest rate increase kept bullion not far from a seven-week high above $1,200 an ounce.

Bullion rose to its highest since Feb. 17 on Monday, supported by a weakening dollar after U.S. non-farm payrolls data fuelled expectations that the Federal Reserve could delay an anticipated rate increase this year.

U.S. jobs posted the slowest growth in more than a year in March.

Spot gold was down 0.6 percent at $1,210.80 an ounce, while U.S. gold for June delivery slipped 0.8 percent to $1,208.60 an ounce.

The dollar rose versus a basket of major currencies, aided by higher Treasury yields, while European shares also climbed, denting gold's appeal as an insurance against risk.

A stronger greenback makes dollar-denominated bullion more expensive for holders of other currencies, while returns on U.S. bonds are closely watched by the gold market, given that

Oil prices to stay lower for longer, says Goldman Sachs

Posted by Forexsq 119 days ago (
img Thrilled about the recent bounce-back in oil prices? Well, it’s too early to get excited about the seven-week high reached on Monday, according to Goldman Sachs analysts, who predict we still have months of low oil prices ahead of us.

While noting that a decline in U.S. rig count has been faster than expected, that reduction is still not enough to change the course of the oil market, they said in a report dated Monday.

“It remains insufficient in our view to balance the U.S. market in 2016,” they said. “Prices need to stay low for longer to achieve a sufficient and sustainable slowdown in U.S. production growth.”

Goldman Sachs has forecast that crude oil will trade around $40 a barrel over the next three months, although it has noted there is “modest upside” to that prediction — that is, there’s a risk prices could be higher.

In early March, the investment bank argued its bearish outlook might be too pessimistic, but despite that concern, it hasn’t since made any change to

Oil rallies on U.S. jobs data, bullish EIA monthly report

Posted by Forexsq 119 days ago (
img Oil futures rallied on Tuesday, erasing losses on strong jobs data and U.S. government forecasts for lower domestic crude production growth and higher global demand for oil.

U.S. job openings surged to a 14-year high in February the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS), lifting oil prices.

"That JOLTS report was certainly quite strong and strong employment equals strong gasoline demand," said John Kilduff, partner at Again Capital LLC in New York.

Oil got more support from news that Minneapolis Fed President Narayana Kocherlakota made a case for waiting until the second half of 2016 to raise interest rates, and to then raise them gradually to just 2 percent by the end of 2017.

Crude futures got additional lift when an Energy Information Administration (EIA) monthly report raised forecasts for U.S. and global demand growth and lowered forecasts for crude oil production growth in the United States.

U.S. May crude CLc1 was up

Oil glut worsens as OPEC market-share battle just beginning: IEA

Posted by Forexsq 83 days ago (
img A global oil glut is building as OPEC kingpin Saudi Arabia pumps near record highs in an attempt to win a market-share battle against stubbornly resistant U.S. shale production, the International Energy Agency (IEA) said on Wednesday.

The West's energy watchdog said in a monthly report that although higher-than-expected oil demand was helping to ease the glut, growth in global oil consumption was far from spectacular.

As a result, signs are emerging that the crude oil glut is shifting into refined products markets, which could make a recent rally in oil prices unsustainable.

"Despite tentatively bullish signals in the United States, and barring any unforeseen disruption elsewhere, the market's short-term fundamentals still look relatively loose," said the IEA, which coordinates energy policies of industrial nations.

Global oil production exceeds demand by around 2 million barrels per day, or over 2 percent, following spectacular growth in U.S. shale production and OPEC's d

Crude Oil Falls Most in a Week

Posted by Forexsq 21 days ago (
img The nuclear accord reached in Vienna on Tuesday could eventually reshape global oil markets. After almost two years of talks, the holder of the world’s fourth-biggest crude reserves will benefit from an easing of international sanctions on exports in return for curbs on its nuclear program, according to an official involved in the talks.

How Much More Oil Can Iran Produce?

Iranian Oil Minister Bijan Namdar Zanganeh says the country can increase exports by 500,000 barrels a day as soon as sanctions are lifted, and then an additional 500,000 a day in the following six months. Iran produced an average of 2.8 million barrels a day this year.

Goldman Sachs Group Inc. says adding 500,000 barrels a day will take about a year because Iran must first demonstrate its compliance with the terms of the nuclear accord and revive aging wells. Further expansion will need foreign investment, BNP Paribas SA says. The country also has 30 million barrels stored on tankers that it could ship more

Gold prices will plunge to 350 dollar an ounce

Posted by Forexsq 4 days ago (
img Gold's big plunge may have only just begun.

A prominent gold forecaster predicts the yellow metal will drop to a mere $350 an ounce, a level unseen since 2003. It's dramatically lower than what most experts are currently calling for.

But Claude Erb's prediction might have merit. Back in 2012, Erb, a former commodities trader at TCW Group, co-authored a landmark research paper with Duke University professor Campbell Harvey that was early to predict gold's downfall. At the time, gold was fetching north of $1,600 an ounce. Now it's trading below $1,100.

The paper used historical analysis to show that if gold is an inflation hedge -- as many people believe -- then it's extremely expensive at current levels.

"Gold is no more or less volatile than stocks or anything else. It can be wildly overvalued, and it's very overvalued right now," Erb told CNNMoney.

Gold could crash more: Erb and Harvey's research suggests that gold's fair value is about $825 an ounce. That would repres

Oil by Rail Exploded in Just the Last 5 Years

Posted by Forexsq 120 days ago (
img America's oil boom has unearthed new supplies of crude so fast that the nation's system of pipelines hasn't been able to keep up. And so an industry is born: Crude by rail.

The animated map below shows the remarkable rise of trains that ship oil to refineries across the country. There was a 50-fold increase in crude by rail between January 2010 and January 2015, according to the Energy Information Administration, which started to comprehensively track the industry for the first time last week. In 2014, more than a million barrels of crude a day traveled by rail.

The sudden rise of new horizontal-drilling techniques, and fracking, has pushed U.S. oil production to the highest since 1972. The new boom towns aren't adequately served by pipelines, so oil companies started loading the output into tanker cars. Rail shipping costs more than traditional pipelines, but it provides a a new level of flexibility and scalability to American oil.

Rail is now the primary mode of shippin

Oil up more than $1 after Saudi's Asia price hike

Posted by Forexsq 120 days ago (
img Oil futures climbed more than $1 a barrel on Monday, after Saudi Arabia raised its prices for crude sales to Asia for the second month running, signaling improved demand in the region.

International benchmark Brent regained ground after tumbling as much as 5 percent on Thursday, when a preliminary nuclear deal was finally reached between world powers and Iran. More Iranian oil could enter global markets if that is followed by a comprehensive deal by June.

But expectations of an immediate increase in supply have been tempered as analysts warned a ramp-up in exports could take months and would likely not happen before 2016.

"While clearly a bearish headline, a final deal and full lifting of sanctions still faces a number of obstacles," Morgan Stanley analysts said in a note.

"Even if a final deal is reached, we do not expect any physical market impact before 2016," the analysts said.

Brent crude for May delivery LCOc1 touched a high of $56.90 a barrel and was up $1.50 fr

Oil falls nearly 4 percent after tentative nuclear deal for Iran

Posted by Forexsq 123 days ago (
img Brent oil fell nearly 4 percent on Thursday after a preliminary pact between Iran and global powers on Tehran's nuclear program, even as officials set further talks in June and analysts questioned when the OPEC member will be allowed to export more crude.

Traders had been fixated on the talks held in Lausanne, Switzerland for over a week as Iran tried to agree with six world powers on concessions to its nuclear program to remove U.S.-led sanctions that have halved its oil exports.

The sanctions against Iran will come off under a "future comprehensive deal" to be agreed by June 30, after it complies with nuclear-related provisions, Iranian Foreign Minister Javad Zarif told a news conference.

"If nothing is going to be signed until June, something could go wrong between now and then," said Phil Flynn, analyst at Price Futures Group in Chicago.

Bob McNally, an adviser to former U.S. president George Bush who heads energy research firm Rapidan Group, noted Iran will need much

Nuclear deal means more Iran oil but just not this year

Posted by Forexsq 123 days ago (
img A framework accord to curb Iran's nuclear program forged on Thursday could eventually allow Tehran to reclaim lost ground in the global oil market. Yet the deal all but guarantees that cannot happen before next year.

By ensuring that sanctions remain intact until Western powers are satisfied Tehran is adhering to the terms, and giving negotiators until June 30 to hammer out a comprehensive agreement, the deal offers little chance for any significant increase in exports until 2016.

While global Brent oil prices tumbled as much as 5 percent on Thursday to $54 in anticipation of a deal that could allow Iran to begin selling more crude within months, traders later began weighing the timing of that return. Brent traded at more than $55 a barrel by day's end.

Verifying compliance by Iran, once the world's fifth-largest oil producer, will "likely take many months after implementation, which itself is likely to slip from the June 30 target," said Bob McNally, president of energy rese

Trader bets $3 million on new lows for crude oil

Posted by Forexsq 124 days ago (
img Though crude rallied 5 percent on Wednesday, some traders are expecting more downside ahead.

The price of oil has fallen to half of what it was last summer, and the ETF that seeks to track oil prices (trading under the ticker symbol USO) has plunged along with it. With the most recent short-term pop, a trader placed a large bet that oil will instead see further downside in the next six weeks.

On Wednesday, when options volume was around 50 percent higher than average, one trader bought 66,000 of a 16.50/14.50 May put spread on the USO priced at 50 cents. Since each contract controls 100 shares, the trader risked $3.3 million.

The trade breaks even should the USO decline to $16 per share. However, if the USO sinks to as low as $14.50—or 17.5 percent below Wednesday's closing price—by May 15, the trade could make back nearly $10 million or triple the amount wagered.

A put is a bearish bet that gives the purchaser the right to sell a stock at a given price by a set date.


What an Iran nuclear deal may mean for crude oil prices

Posted by Forexsq 124 days ago (
img Not surprisingly, oil prices took a pounding following word that Iran reached a preliminary agreement with six world powers over its nuclear program.

The Associated Press reported the two parties have “agreed on the outlines of an understanding that would open the path to a final phase of nuclear negotiations.” A news conference in Switzerland was held on Thursday around 1:30 p.m. Eastern Time to announce the deal, but June 30 remains the final deadline for a comprehensive deal to be reached.

Iran’s Foreign Minister Javad Zarif tweeted that “solutions” were found and that the country is “ready to start drafting immediately.”

Lifting sanctions on Iran could mean that the country is allowed to export oil, which could mean fresh supplies flowing into a market already swimming in too much oil.

May crude oil CLK5, -1.14% was down $1.33, or 2.5%, at 48.91 a barrel on the New York Mercantile Exchange while May Brent crude prices LCOK5, -3.33% had been down more than 5% on the n

US oil settles down 95 cents or 1.9%

Posted by Forexsq 124 days ago (
img Oil prices tumbled on Thursday after global powers negotiating a deal with Iran announced they had reached solutions on key parameters of the country's nuclear program.

Framework measures, if implemented by Iran, would eventually result in the European Union and United States easing sanctions related to Iran's nuclear program. In an "international joint venture," Iran would cut its nuclear capacity while agreeing to monitoring and modernization of its facilities.

A final deadline for the talks was set for June 30.

Prices fell as much as 5 percent after the announcement, which capped more than week of talks in Lausanne, Switzerland between Iran and the United States, Britain, France, Germany, Russia and China.

A nuclear pact for Tehran could remove Western sanctions on the OPEC nation's oil exports, bringing millions of additional Iranian crude barrels onto a market already brimming with supply.

Brent futures were down $2.44, or 4.3 percent, at $55.10 a barrel, by 2:17 p

Oil down as Iran talks back in focus; weak dollar pares loss

Posted by Forexsq 124 days ago (
img Oil prices fell on Thursday as focus returned to talks for a nuclear pact between Tehran and global powers that could put millions of additional Iranian crude barrels onto a market already brimming with supply.

Crude prices fell as much as 3 percent as the marathon talks in Lausanne, Switzerland extended for a second day past its original deadline for a deal, before a weak dollar pared some of the losses.

"There are positive signs that a deal will be done for Iran with the talks continuing past the deadline, and that's weighing again on oil today," said Joseph Posillico, senior vice president of energy futures at Jefferies in New York.

Iranian Foreign Minister Mohammad Javad Zarif said "significant progress" had been made at the talks. Diplomats said the chances of a preliminary accord in the next few hours were finely balanced.

U.S. crude futures were down 73 cents, or almost 1.5 percent, at $49.36 a barrel in New York by 10:18 a.m. EDT, after falling more than $1.70 earl

US needs to cut Oil not OPEC, Goldman Sachs said

Posted by Forexsq 124 days ago (
img The onus for restoring the oil price back to an equilibrium lies squarely on the shoulders of countries like the U.S. and not on the Organization of the Petroleum Exporting Countries (OPEC), a top Goldman Sachs analyst told CNBC.

Michele Della Vigna, head of European energy research at Goldman Sachs, said non-OPEC oil producers had created the oversupply in the market which has weighed on prices.

"I think the market has realized that where we need to find the adjustment is onshore U.S. and that's where the market is focused," he told CNBC Thursday.

"The adjustment is starting to happen there. Clearly an OPEC cut would help getting to the equilibrium faster, but at the end of the day, it is non-OPEC that needs to sort out the oversupply that it has created."

Weak global demand and booming U.S. shale oil production are seen as two key reasons behind oil's price plunge, which has fallen around 50 percent since mid-June last year. OPEC's reluctance to cut its output at its las

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