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Black Gold Continues to Find Weakness

“West Texas Intermediate traded near the lowest level in more than a week on forecasts that U.S. supplies climbed to the highest since at least 1931 amid production the IEA said is “transformative” for world markets.

Futures fell for a fourth day in New York on speculation that rising supplies will counter signs of an economic recovery. Crude inventories probably increased 450,000 barrels to 396 million in the week ended May 10, according to a Bloomberg News survey before Energy Department data tomorrow. Growth in North American production will be as significant for markets asChina’s economic boom, the International Energy Agency said.

“Supply-demand is skewed to the oversupply side,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “There is currently a lot of spare capacity and global crude overproduction. The multi-decade high in U.S. supply will keep weighing on WTI.”

WTI for June delivery was at $94.53 a barrel, down 64 cents, or 0.7 percent, in electronic trading on the New York Mercantile Exchange at 12:21 p.m. London time. The volume of all contracts traded was 5 percent above the 100-day average. Prices fell 87 cents to $95.17 yesterday, the lowest close since May 2.

Brent for June settlement on the London-based ICE Futures Europe exchange lost 74 cents and was at $102.08 a barrel. The European benchmark grade was at a premium of $7.40 to WTI futures. The spread was $7.65 yesterday, the narrowest based on closing prices since January 2011.

Cushing Supplies…”

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Dr. Copper Gets Hit as China Slowdown is Feared

“Copper fell the most in almost two weeks in London amid signs growth is slowing in China, the world’s biggest consumer of the metal, as inventories swell.

China’s economy will expand 7.6 percent this year, JPMorgan Chase & Co. said today, cutting its estimate from 7.8 percent a day after a report showed industrial production in the nation expanded less than predicted by economists. Copper stockpiles monitored by the London Metal Exchange increased the most in four weeks, according to daily figures.

“The market is well supplied, and China is not growing as fast as everyone was hoping,” David Wilson, an analyst at Citigroup Inc. in London, said by phone.

Copper for delivery in three months slid 2.3 percent to $7,241 a metric ton by 11:32 a.m. on the LME. Prices dropped as much as 2.4 percent, the most since May 1. Copper for delivery in July fell 2.2 percent to $3.287 a pound on the Comex.

The metal also retreated as European Union statistics showed industrial production in the euro area dropped 1.7 percent on the year in March, the 17th decline in a row….”

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Black Gold Falls as OPEC Inventory Hits Five Month Highs

West Texas Intermediate crude fell for a third day, the longest run of declines in four weeks, as OPEC boosted output to the highest level in five months.

WTI slid as much as 1.2 percent, and London-traded Brent dropped for a second day. The Organization of Petroleum Exporting Countries produced 30.46 million barrels a day last month, up from 30.18 million in March, the group’s secretariat said May 10. That’s the most since November. Morgan Stanley predicted that the spread between WTI and Brent will widen as U.S. supplies accumulate.

“Even if demand surprises, the market is still likely to remain comfortably supplied,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who predicts that WTI will struggle to surpass $96.80 a barrel this month.

WTI for June delivery fell as much as $1.18 to $94.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.18 at 12:00 p.m. London time. The volume of all contracts traded was 1.2 percent below the 100-day average.

Brent for June settlement lost as much as $1.24, or 1.2 percent, to $102.67 on the ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.59 to WTI, the narrowest since January 2011, compared with $7.87 on May 10.

Saudi Output…”

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Au Continues to Show Weakness From a Higher Dollar

“Gold fell for a third day in New York as strength in the dollar may mean more declines in exchange-traded products holdings.

Holdings in gold-backed ETPs dropped 0.6 percent on May 10 as the dollar reached a five-week high against six major currencies, according to data compiled by Bloomberg. The U.S. Dollar Index climbed as much as 0.2 percent today as the Standard & Poor’s GSCI gauge of 24 commodities fell 0.6 percent.

“Commodities in general have been hurt by the dollar’s recent strength,” said Sun Yonggang, a macroeconomic strategist at Everbright Futures Co., a unit of one of China’s largest state-owned investment companies. “Investors are losing interest in gold.”

Gold for June delivery dropped 0.6 percent to $1,428.10 an ounce by 6:11 a.m. on Comex in New York. Prices dropped 1.9 percent last week, the first decline in three weeks….”

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Survey Shows Coking Coal Contracts Hit Record Lows

BHP Billiton Ltd. (BHP), the world’s biggest exporter of steelmaking coal, may face a drop in contract prices to a record low in the third quarter amid rising supply and weaker Asian demand.

Asian buyers will probably pay $165 a metric ton for hard coking coal in the three-month period starting July 1, according to the median estimate of five analysts surveyed by Bloomberg News. That would match the record low for contracts set in the first quarter and compare with $172 a ton in the second quarter. Spot prices have slid 11 percent since March, data compiled by Bloomberg show.

Rising supply from Mongolia and South Africa has added to an increase from Australia, which is rebounding from January floods that shut rail lines and curbed exports. A slowing Chinese economy is also causing weakness in the price, Shuma Uchino, the chief financial officer of Mitsubishi Corp. (8058) said in Tokyo on May 8. The Japanese company is a partner in the world’s biggest exporter, the BHP Billiton Mitsubishi Alliance.

“There’s too much supply,” said Daniel Hynes, the Sydney-based head of commodity strategy at CIMB Group Holdings Bhd. (CIMB) who predicts contracts may be settled at $180 a ton. “There’s a recovery from the Australian market, which is compounding weak demand from China and Japan, the biggest importer of premium hard coking coal. That has meant that the market has remained relatively weak.”

Supply Increase…”

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WTI Continues to Fall as Stockpiles Rise

“The price of oil dropped below $95 a barrel on Friday as a strengthening dollar made crude more expensive for traders using other currencies.

By early afternoon in Europe, benchmark crude for June delivery was down $1.74 to $94.65 a barrel in electronic trading on the New York Mercantile Exchange. The contact lost 23 cents to finish at $96.39 a barrel on the Nymex on Thursday.

Since oil is traded in dollars, a stronger dollar makes crude and other commodities less appealing to investors with other currencies.

On Friday, the euro was down to $1.2998 from $1.3041 late Thursday in New York. The dollar also gained on the Japanese yen and was trading at 101.34 yen on Friday, the first time it broke above 100 yen in over four years, since April 2009.

Recent signs of improvement in U.S. employment data have sparked speculation that the Federal Reserve might scale back its aggressive monetary policy.

Traders were also influenced by remarks Thursday by Charles Plosser, president of the Fed’s Philadelphia regional bank, said Stan Shamu of IG Markets in Melbourne…..”

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OPEC Crude Production Rises to Five-Month High on Saudi Increase

“OPEC boosted crude output in April to the highest in five months as Saudi Arabia increased production, helping lower oil prices amid concern that global economic growth is slowing.

The Organization of Petroleum Exporting Countries produced 30.46 million barrels a day last month, up from 30.18 million in March, the group’s Vienna-based secretariat said today in its Monthly Oil Market Report. That’s the most since November. The estimates are based on secondary sources.

Brent crude slipped 7 percent last month as Europe struggled to move beyond its debt crisis and China’s growth and manufacturing showed signs of a slowdown. The drop brings prices closer to the $100-a-barrel target Saudi Arabia’s Oil Minister Ali Al-Naimi described as “reasonable” for consumers and producers. Brent, the benchmark for more than half of the world’s oil, traded at about $104 today on the ICE Futures Europe exchange in London.

“The continued decline in the eurozone, the significant deceleration in the first quarter in some of the Asian economies and the recently acknowledged slowdown in Russia all have the potential to again push growth down,” according to OPEC, which supplies about 40 percent of the world’s oil.

Saudi Arabia, the world’s largest crude exporter, pumped 9.27 million barrels a day in April, rising from 9.13 million in March, OPEC said. That’s the most since November and compares with the country’s own figure of 9.31 million barrels based on its direct communication with the group.

Fragile Recovery

Global oil demand is forecast to rise 800,000 barrels a day to 89.66 million barrels a day this year, little changed from last month’s estimate….”

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Black Gold Falls for a Third Day as Global Stockpiles Rise

“Brent futures fell for a third session as crude inventories in the U.S. increased. Iraq resumed oil exports via Turkey today after a halt caused by sabotage to a pipeline.

Brent dropped as much as 0.8 percent. Total U.S. crude stockpiles rose by 230,000 barrels, according to the Energy Department. Iraq’s state-run North Oil Co. repaired the pipeline to Turkey following a bombing attack yesterday in the city of Mosul. The weekly U.S. jobless claims will be announced at 8:30 a.m. Washington time and are expected to show an increase to 335,000, according to a Bloomberg survey.

“The market looks to be taking stock, awaiting the next economic data,” said Michael Hewson, a market analyst at CMC Markets Plc in London who expects WTI to peak at $98 this year. “It’s a demand story at the moment as inventories keep rising. We need positive economic news to stop the fall and that could come with the weekly jobless claims.”

Brent for June settlement fell as much as 78 cents to $103.56 a barrel, and was at $103.73 as of 12:39 p.m. London time on the ICE Futures Europe exchange.

West Texas Intermediate for June delivery was down 71 cents at $95.91 a barrel in electronic trading on the New York Mercantile Exchange. The front-month European benchmark was at a premium of $7.82 to WTI. It closed at $7.72 yesterday, the narrowest gap since January 2011.

U.S. Inventories….”

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Black Gold Trades Flat to Down On Expectations of Climbing Inventory

“West Texas Intermediate crude fell for the first time in four days before government data that may show U.S. stockpiles rose from an 82-year high. Saudi Arabia increased production to the most in five months.

Futures slid as much as 0.9 percent in New York after the biggest three-day gain since the first week of August. U.S. crude supplies probably climbed by 2 million barrels last week, according to a Bloomberg News survey before the Energy Information Administration report tomorrow. Saudi Arabia raised output to 9.32 million barrels a day in April, a person with knowledge of the country’s production said. China’s external trade probably slowed last month, a separate survey showed.

“We are probably going to be presented with another weekly inventory rise from the U.S. tomorrow, and that obviously does bring the focus that the market is still well supplied,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said in a telephone interview. “Whether we are ready to see a return toward the $110 level, which is the average for the last few years, it’s probably too early to say.”

WTI for June delivery declined as much as 90 cents to $95.26 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.66 at 10:38 a.m. London time. The volume of contracts traded was little changed from the 100-day average. Futures climbed 55 cents to $96.16 yesterday, the highest close since April 2, capping a three-day gain of 5.6 percent.

Market Struggle…”

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Black Gold Pares Gains After Syria Accuses Israel of Air Strikes

“West Texas Intermediate crude headed for the biggest three-day gain in nine months as air strikes in Syria renewed concern that unrest will spread in the Middle East and disrupt supply.London’s Brent oil rose.

WTI futures climbed as much as 1.6 percent in New York after Syria’s state news agency said Israeli aircraft attacked a military research center on the outskirts of Damascus yesterday. The offensive was a “declaration of war,” Syria’s deputy foreign minister told CNNIsrael didn’t confirm involvement. The Middle East accounted for 33 percent of global crude output in 2011, according to BP Plc (BP/)’s Statistical Review of World Energy. WTI capped a second weekly gain May 3 after U.S. employment rose more than forecast.

“If the geopolitical events between Israel and Syria start to escalate, the market will automatically write in a premium and you should see a spike in the price of oil,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The key on the topside is $98.50 and a break of that area may send the price to $100. Another couple of bombings and you will see it.”

WTI for June delivery gained as much as $1.56 to $97.17 a barrel in electronic trading on theNew York Mercantile Exchange and was at $96.23 at 3:12 p.m. Singapore time. The volume for all contracts traded was more than four times the 100-day average. Futures increased $1.62 to $95.61 on May 3, the highest close since April 2. Prices have risen 5.1 percent over the past three days, the most since August, and climbed 2.8 percent last week.

‘Dangerous Situation’…”

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AU Rises on Signs the Selling is Over in ETFs

“Gold gained in New York on signs of a slowdown in investor sales of exchange-traded funds.

Assets fell about 0.5 metric ton to 2,262.148 tons on May 3, the smallest decline since holdings last gained on April 1, according to data compiled by Bloomberg. Prices have climbed the past two weeks on increased coin and jewelry demand.

“We need to see ETF redemptions slow down in order for the next leg higher.” said Xiang Nan, an analyst at Citics Futures Co., a unit of China’s biggest listed brokerage.

Gold for June delivery advanced 0.7 percent to $1,47.40 an ounce by 7:35 a.m. on Comex in New York. Prices slumped 13 percent over two days last month, the most in three decades.

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said he wouldn’t buy gold after the slump….”

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Copper Leads Metals Higher

“Copper led metals higher before a U.S. report that may show employment climbed in the world’s largest economy, while the yield on Spain’s 10-year bonds fell below 4 percent for the first time since 2010. European stocks and U.S. index futures were little changed.

Copper jumped 4.2 percent and zinc increased 2.1 percent at 7:56 a.m. in New York. The Spanish 10-year yield dropped eight basis points to 3.97 percent, and the Italian 10-year yield fell to the lowest since February 2006. The euro strengthened against the dollar and the yen. The Stoxx Europe 600 Index advanced 0.1 percent, while futures on the Standard & Poor’s 500 Index retreated 0.1 percent….”

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Brent and WTI Fall as Stockpiles Continue to Build and Consumption Falls

Brent crude fell for a second day after OPEC’s production increased to a five-month high and an industry group said U.S. stockpiles climbed for the first time in three weeks.

Futures slid as much as 1.8 percent in London after dropping 1.4 percent yesterday. U.S. crude inventories rose by 5.2 million barrels last week, the American Petroleum Institute said. Government figures today are projected to show a gain of 1.1 million barrels, according to a Bloomberg News survey. Daily output by the Organization of Petroleum Exporting Countries increased in April by 194,000 barrels a day, a separate survey indicated. An index of manufacturing in China signaled weaker expansion in April.

“With inventories at the levels they are at, it is a question of how much demand there is, and there is growing evidence of a slowdown in economic activity with even China weaker than expected,” Michael Hewson, a market analyst at CMC Markets Plc in London, said today by telephone. “The direction of travel on oil is down, and I see no reason to change that view unless OPEC cuts production.”

Brent for June settlement slid as much as $1.83 to $100.54 a barrel on the London-based ICE Futures Europe exchange, the lowest intra-day level in a week, and was at $100.58 at 1:21 p.m. local time. Futures fell $1.44 to $102.37 yesterday, capping a 7 percent drop for April. Trading was 2 percent above the 100-day average for the time of day. Prices are down 9.5 percent this year.

Cushing Supplies

West Texas Intermediate for June delivery declined as much as $1.79 to $91.67 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.81 at the same time today. Front-month Brent was at a premium of $8.73 to WTI, the narrowest gap since Dec. 30, 2011…..”

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Copper Slips Over 1% as China Manufacturing Slows

“Copper fell for a second day in London on concern demand will take time to revive after an official manufacturing gauge was weaker than projected in China, the world’s biggest consumer of the metal.

A Purchasing Managers’ Index was at 50.6 in April, China’s statistics bureau and logistics federation said today, below the 50.7 median estimate in a Bloomberg News survey of economists. Markets in the country will reopen tomorrow after a three-day break. Copper rose in London trading last week after five weeks of declines, the longest streak since November.

“Chinese end-users were taking advantage of low prices to restock,” Nic Brown, head of commodities research at Natixis SA in London, said by e-mail today. “With China out for three days, the market is losing some of that positive impetus.”

Copper for delivery in three months lost 1.3 percent to $6,964 a metric ton by 9:22 a.m. on the London Metal Exchange after slumping for a third month in April. Copper for delivery in July dropped 1.1 percent to $3.151 a pound on the Comex in New York, where futures trading volumes were 48 percent lower than the average in the past 100 days for the time of day.

“Despite the poor macro data we’ve been seeing in recent weeks, I’d imagine there might also be some replenishment of inventories as demand for copper products begins to improve,” Brown said of China. Imports of refined copper into the country rose in March from a 19-month low, figures showed last week….”

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Commodities Fall for a Second Day on Slowing Global Growth Data

“Commodities dropped for a second day, led by metals and oil after data showed weaker manufacturing growth in China. U.K. stocks and U.S. equity futures rose on bets the Federal Reserve will continue its stimulus efforts.

The Standard & Poor’s GSCI gauge of 24 commodities fell 1.2 percent as of 8:03 a.m. inLondon, as aluminum slipped 2.2 percent and oil declined 1.5 percent. The U.K.’s FTSE 100 Index rose 0.6 percent, while S&P’s 500 Index futures added 0.1 percent. Japan’s Topix Index fell 0.6 percent after posting its best month since 1999. The Dollar Index (DXY) slipped for a fifth straight day. Most European markets were closed for a holiday.

Chinese and Australian reports today signaled a slowdown inmanufacturing as a U.K. Purchasing Managers’ Index showed a third month of contraction. U.S. private employers probably added the fewest jobs in six months, after business activity unexpectedly shrank, according to a Bloomberg survey. The Federal Reserve may consider maintaining its bond-buying program at a two-day meeting concluding today, a separate survey shows.

“There is little doubt that risks to global economic growth for 2013 are tilted to the downside,” said Matthew Sherwood, the Sydney-based head of investment market research at Perpetual Ltd., which manages about $25 billion. “Earnings growth after several years of very subdued performance still seems a bit of a stretch.” …”

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Physical Demand for Gold Jumps All Over the Globe

“Surging demand for gold from Dubai to Istanbul has pushed physical premiums in the region to levels not seen in years as the biggest price slump in three decades lures consumers, according to MKS (Switzerland) SA.

Premiums paid by wholesalers and bulk buyers in Dubai to secure a 1 kilogram bar of bullion are being quoted between $6 an ounce and $9 an ounce over the London cash price, said Frederic Panizzutti, global head of marketing and sales at the Swiss-based bullion refiner. That compares with about 50 cents before the rout, Panizzutti, also chief executive officer of MKS Precious Metals DMCC, said in an interview from Dubai.

Gold fell to the lowest in more than two years this month on speculation that the global economy is recovering, unleashing a purchasing frenzy among coin and jewelry buyers from China to the U.S. Consumer demand for jewelry, bars and coins inTurkey and the Middle East represented about 9.4 percent of the global total last year, according to the World Gold Council. Bars have been cleared from display in the souks, according to Gerry Schubert, head of precious metals at Emirates NBD PJSC.

“Physical demand has been tremendous in a way I haven’t seen for a number of years,” said Jeffrey Rhodes, global head of precious metals at INTL FCStone Inc., who’s worked in the industry for more than three decades. “The price collapse prompted a physical gold rush and the evidence of the extent of that is the prolonged period of high premiums that we’ve seen. Reports from the gold souks are that business is good,” Rhodes said from Dubai.

Bear Market….”

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Au Continues to Bounce Back

“Gold advanced in New York, trimming the worst monthly loss since December 2011, as demand for physical metal countered outflows from bullion-backed exchange- traded products and the dollar weakened. Silver also gained.

Gold climbed 4.2 percent last week, the best showing since January 2012, as coin and jewelry demand expanded from the U.S. to China and India. The volume for the benchmark contract on the Shanghai Gold Exchange surged to a record last week, while premiums to secure supplies in India jumped to five times the level before the slump. Coin sales by the U.S. Mint are set for the highest since December 2009, while inventories monitored by the Comex tumbled last week to the lowest level since July 2008.

“The key question in the near term is whether retail and jewellery demand can continue to counter ETP outflows and the rise in gross shorts,” Barclays Plc analysts Suki Cooper, Lynnden Branigan and Christoper Louney wrote in a note today. “In our view, the vulnerability of further ETP outflows subsides should prices recover to above the $1,500/ounce level or equity markets underperform, given the stronger correlation between the two.”

Gold for June delivery rose as much as 1.7 percent to $1,478.30 an ounce on the Comex in New York and traded at $1,476 by 7:35 a.m. The metal is heading for a 7.5 percent drop in April after the metal plunged into a bear market this month. Bullion for immediate delivery rose 0.9 percent to $1,475.68 an ounce in London.

Hong Kong Buying…”

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A Buying Frenzy Depletes the U.S. Mint of Small Gold Eagle Coins

“The U.S. Mint ran out its smallest American Eagle gold coin after demand surged following the biggest drop in futures prices in 33 years.

Sales of the coins weighing a 10th of an ounce were suspended after demand more than doubled in 2013 from a year earlier, the Mint said today in a statement. Total sales of American Eagles in April have almost tripled from a month earlier, according to Mint data on the website.

On April 15, gold futures in New York plunged 9.3 percent, the most since 1980. Retail sales and jewelry demand soared in India, the world’s top buyer, and China, the second-biggest. Coin sales also surged in Australia.

“This week has been very busy for us,” Michael Kramer, the president of New York-based MTB Inc., a dealer authorized to purchase coins directly from the Mint. “We do not yet anticipate suspension” of heavier coins, he said….”

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