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Black Gold Rises on Speculation That Last Week’s Drudging Was Excessive

“Brent crude futures rose to a one- week high above $100 a barrel on speculation last week’s drop was excessive.

Brent advanced as much as 1.2 percent after the contract’s 14-day relative strength index slipped to 31 on April 19 signaling prices had declined too rapidly. The Stoxx Europe 600 Index increased as much as 0.9 percent. Money managers reduced net-long positions, or wagers that West Texas Intermediate will rise, by 6.8 percent in the week ended April 16, according to the U.S. Commodity Futures Trading Commission. They trimmed holdings on Brent for the second week to the lowest since Dec. 18, data from ICE Futures Europe exchange show.

“There’s a recovery from the sell-off last week and crude is growing in tandem with equities,”Andrey Kryuchenkov, an analyst at VTB Capital in London, said by phone today. “Some buy orders may have been triggered by Brent breaching $100, so computers are driving the market to a degree.”

Brent for June settlement rose as much as $1.15 to $100.80 a barrel and was at $100.69 as of 12:02 p.m. London time. The front-month European benchmark grade was at a premium of $11.67 to June WTI.

WTI for May delivery, which expires today, was at $88.71 a barrel, up 70 cents, in electronic trading on the New York Mercantile Exchange, after dropping 3.6 percent last week. The more-active June future was up 71 cents at $88.98. The volume of all Brent contracts traded was 0.9 percent below the 100-day average while WTI was 8.6 percent above….”

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Gasoline Expected to Fall Below $3.50

Gasoline prices continue to decline very sharply. Over the past month, they are down another 5%, and soon will fall below $3.50. If low gas prices tend to help the economy, gross domestic product (GDP) should get a boost this quarter.

The AAA Fuel Gauge put the price of a gallon of regular nationwide at $3.512 yesterday, down from $3.692 a month ago, as well as from $3.899 a year ago. Other than Hawaii, where the price for regular is $4.385, not a single state has an average price above the $4 level. And $4 often is seen as the mark at which the media and economists say the cost will undermine consumer and business activity, regardless whether that is exactly true.

Oil prices are not a perfect predictor of gasoline prices because, among other things, of the roles of refinery and transport. However, oil is by far the largest contributor to the price. And oil prices continue to fall rapidly. The price of crude sits just below $86, down from a 52-week high of $106, as well as $95 just five days ago. The irony of the price drop is that it is based largely on a drop in global demand, due to the slowing of major economies. In the meantime, the drop will stimulate American GDP….”

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Au Gains for a Third Day After Historic Melt Down

“Gold gained for a third day in London as prices near the lowest in more than two years attracted jewelry buyers and global economic data disappointed.

Jewelry demand in India and China surged as consumers rushed to take advantage of the price drop. Retail sales tripled across China April 15-16, the China Gold Association reported. The U.S. Federal Reserve, which buys $85 billion of securities a month to support economic recovery, said in its Beige Book business survey that the U.S. expansion remained moderate. Data this week showed slower-than-expected Chinese economic growth and European car sales slid to a 20-year low.

“Due to the latest turn to bearish macro sentiment, a further fall in gold has been prevented for now,” Bjarne Schieldrop, the Oslo-based head of commodity research at SEB AB, said today by e-mail. A surge in physical demand is “positive for gold and supportive,” he said.

Immediate-delivery gold climbed 0.8 percent to $1,387.23 an ounce by 9:50 a.m. in London trading. Prices fell to $1,321.95 on April 16, the lowest since January 2011. Gold for June delivery added 0.4 percent to $1,387.90. Futures trading volume was more than double the average for the past 100 days for this time of day, according to data compiled by Bloomberg….”

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Au Finds Follow Through Bounce Action as Investors Expect Bargain Hunters

“Gold advanced for a second day in London on speculation that the biggest slump in three decades will spur increased purchases from investors and consumers. Futures declined in New York.

Bullion has lost 17 percent in 2013 after rising sixfold in a 12-year rally through last year. The metal slipped into a bear market on April 12 on speculation central banks in Europe may sell holdings to raise funds and that a U.S. recovery would spur the Federal Reserve to rein in stimulus. The 14 percent plunge in the two days through April 15 was the most since February 1983.

“If you look at the fundamentals, the drop was excessive and does not correspond to the reality that we still have a lot of troubles out there — debt monetization, real interest rates will remain in negative territory and the dollar in the long run still is a currency that won’t be that strong,” Dominic Schnider, head of commodities research at UBS AG’s wealth- management unit, said in a Bloomberg Television interview. “Nevertheless, a lot of damage has been done.”

Gold for immediate delivery gained as much as 1.3 percent to $1,386.25 an ounce and was at $1,383.47 at 11:47 a.m. in London. Prices touched $1,321.95 yesterday, the lowest since January 2011. Bullion’s 14-day relative strength index was at 23.8, below the level of 30 that indicates to some analysts who study technical charts that a rebound may be imminent….”

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Black Gold Continues to Fall, Brent Below $100 & WTI at Four Month Lows

Brent crude fell below $100 a barrel for the first time since July amid signs global economic growth may slow, curbing fuel demand. West Texas Intermediate declined to a four-month low on speculation U.S. supplies rose.

Brent futures slid as much as 2.6 percent to $98 a barrel, while WTI dropped to the lowest intraday price since Dec. 14. German investor confidence declined more than economists forecast in April. U.S. crude stockpiles probably climbed 1.5 million barrels last week to 390.4 million, the highest since July 1990, according to a Bloomberg survey before a government report tomorrow.

“As with many times in the past, oil has been used as the tool to express concerns about the macro economy and we are in the same situation now,” said Amrita Sen, chief oil market analyst at Energy Aspects Ltd., a research company in London, who predicted on April 8 that Brent may soon drop to $100. “Brent has been under pressure due to an improvement in supplies and a lack of demand.”

Brent for June settlement fell as much as $2.63 on the London-based ICE Futures Europe exchange, and recovered to $99.87 as of 11:48 a.m. local time. The volume of all futures traded was 70 percent higher than the 100-day average for the time of day. Prices are down 10 percent this year after four annual gains. The front-month European benchmark grade was at a premium of $11.24 to WTI.

OPEC Basket

WTI for May delivery slipped as much as $2.65 to $86.06 a barrel in electronic trading on theNew York Mercantile Exchange. Prices are down a fourth day, the longest run of declines this year. The volume of all futures traded was more almost three times higher than the 100-day average. The contract fell $2.58 to $88.71 yesterday, the lowest close since Dec. 24….”

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$GS: Au Sell-off Due to Investor Concerns That Many Nations Will Follow Cyprus to Relieve Sovereign Debt Issues

“The selloff in gold that cut futures 13 percent over two days was sparked by investor concern that European governments may have to follow Cyprus in selling part of their holdings, according to Goldman Sachs Group Inc.

The slump, which drove prices to their lowest level since January 2011 today, was exacerbated as the metal fell below so- called technical-support levels, analysts including Jeff Currie and Damien Courvalin said in a report dated today, entitled “There Are Weeks When Decades Happen.”

Gold has plunged into a bear market as investors reduced holdings in exchange-traded products amid signs the U.S. economy is recovering, paring haven demand. Goldman said April 10 the turn in the gold cycle was quickening and investors should sell the metal. The drop in the past two days was one of the largest corrections in modern history, according to Deutsche Bank AG.

“The sharp selloff in gold was triggered by growing fears that the central bank of Cyprus would sell its gold reserves, potentially reflecting a larger monetization of gold reserves across other European central banks,” the Goldman analysts wrote in the report dated today.

Bullion for June delivery was 1.3 percent higher at $1,378.50 an ounce on the Comex at 5:33 p.m. in Singapore after losing as much as 2.9 percent to $1,321.50. Futures plunged 9.3 percent yesterday after entering a bear market last week, falling more than 20 percent from the record close in 2011.

Raise Funds…”

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Au Hits Bear Market Territory

“Gold plunged into bear market territory Friday, as a fierce selling wave swept across commodities markets and shorts raised their stakes.

Gold tumbled four percent and fell below $1,500 per troy ounce for the first time since July, 2011. It officially entered bear market territory Friday, down more than 20 percent from its August, 2011 high of $1,891.90.

Silver futures lost nearly five percent to $26.30, and it is now 45 percent below its April, 2011 to high. Oil fell more than 2 percent, with West Texas Intermediate breaking through a support level at around $92 per barrel…”

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WTI Falls Erasing Weekly Gains

“West Texas Intermediate crude fell for a second day, erasing its advance this week. The U.S. benchmark’s discount to London-traded Brent neared its narrowest in more than 14 months.

Futures dropped as much 1.4 percent in New York as Cyprus said it will ask the euro area for further financial aid, while investors awaited a report forecast to show U.S. retail sales stagnated in March. Oil prices may rebound next week, according to a Bloomberg News survey of analysts. WTI’s discount to Brent shrank to as little as $10.40 a barrel today, the smallest gap on an intraday basis since Jan. 26, 2012.

“The supply balance is still a bit weak,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, who forecasts that WTI will average $96 a barrel this quarter. “We are close to the bottom, as we expect the market to tighten, but the bottoming-out process may take some time.”

WTI for May delivery declined as much as $1.26 to $92.25 a barrel in electronic trading on theNew York Mercantile Exchange and was at $92.34 at 12:12 p.m. London time. The volume of all futures traded was 73 percent greater than the 100-day average. The contract has slipped 2.4 percent over the last two days, its biggest decline since April 4. Prices have fallen 0.4 percent this week, paring their gain this year to 0.5 percent.

Brent for May settlement, which expires on April 15, fell $1.29 to $102.92 a barrel on the London-based ICE Futures Europe exchange. The more actively traded June future slid $1.41 to $102.97. The European benchmark grade was at a premium of $10.58 to WTI futures.

Retail Sales…”

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Gold Continues to Falter Amid Recovery Hopes

“Gold fell to the lowest in a week and headed for the biggest weekly drop since February on speculation a strengthening dollar and U.S. economy will curb demand for a protection of wealth. Precious metals declined.

The dollar rose as much as 0.5 percent versus the euro today and U.S. equities reached a record yesterday as data showed U.S. jobless claims fell more than estimated last week. Minutes of the Federal Reserve’s March meeting released April 10 showed several members were in favor of pulling back on its $85 billion monthly debt-buying program this year. Gold fell below a “crucial” support level of $1,550 an ounce today, said Andrey Kryuchenkov, an analyst at VTB Capital in London

“It’s the dollar rebound,” Kryuchenkov said today by phone. “There is a lack of conviction in gold and with equities performing so well, why bother?”

Gold for immediate delivery fell 0.9 percent to $1,547.45 an ounce by 10:55 a.m. in London. Prices reached $1,545.16 and are down 2.1 percent this week. Bullion for June delivery was 1.2 percent lower at $1,546 on the Comex in New York. Futures trading volume was 8 percent above the average in the past 100 days for this time of day, data compiled by Bloomberg show.

Gold hasn’t closed below $1,550 in London since May. It’s down 7.6 percent this year on mounting optimism that the U.S. will help lead a global economic recovery. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, fell to 1,181.4 metric tons yesterday, the least since May 2010.

Cyprus Rescue…”

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IEA Lowers Expectations for Global Oil Demand

“In its market report for April, the International Energy Agency (IEA) has once again lowered its expectation for global oil demand this year. In theory, that should keep the price of gasoline down.

The International Energy Agency expects 2013 to be the third consecutive year of weak growth in demand, adding only 795 000 barrels per day (795 kb/d), according to the April Oil Market Report (OMR) published today.

Relatively strong demand growth among non-OECD countries of 1.28 million barrels a day (mb/d) will be tempered by a contraction of 480 kb/d in OECD consumption, particularly in Europe, where it will shrink by 340 kb/d. European demand has not been this weak since 1985.”


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New Mines Threaten to Continue a Bear Market in Iron Ore

“The world’s biggest iron-ore producers are planning $250 billion of new mines, threatening to deepen a price slump for the commodity already forecast to drop for at least the next three years.

Mining companies are facing growing investor pressure to defer or cancel projects to stem price declines. Rio Tinto Group (RIO), the second-largest iron ore exporter, will decide on one of the biggest industry expansions in Western Australia in the second half. A decision to delay would boost its earnings in 2015 by $3.7 billion, according to Liberum Capital Ltd.

The price of iron ore, the most shipped commodity after oil, more than tripled in the past decade, encouraging the biggest mining companies to boost output. That was before a surge in Chinese steel output that drove the bull market through 2011 started to wane. Given iron ore operations made up 78 percent of Rio’s earnings last year and more than 90 percent at Brazil’sVale SA (VALE5), producers are being forced to review plans.

“It’s the most important issue the mining industry is facing today — whether or not to collectively act to destroy the single greatest source of value generation,” said Paul Gait, a London-based analyst at Sanford C. Bernstein & Co. “Getting this right and not repeating the mistakes of the past is absolutely key.”

Investors should be concerned. According to Credit Suisse Group AG, over the last three years, 80 percent of the time iron ore prices have fallen European mining companies have underperformed.

Over-Enthusiastic Investing….”

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WTI Rises for a Second Day

“West Texas Intermediate rose a second day after China reported inflation eased more than forecast last month. U.S. crude stockpiles probably increased to the highest level in 22 years, a Bloomberg survey showed.

Futures gained as much as 0.5 percent in New York after advancing the most in almost two weeks yesterday. Goldman Sachs Group Inc. (GS) said it expects supplies at the U.S. delivery hub in Cushing, Oklahoma, to shrink at the end of next month, and pushed back its recommendation for trading the discount on WTI versus Brent. U.S. crude inventories climbed by 1.5 million barrels in the week to April 5 to 390 million, according to a Bloomberg News survey before data from the Energy Department Administration tomorrow.

“Any healthy demand for oil will have to come from Asia or the Middle East,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “Hopes for a Chinese money bazooka have increased.”

WTI for May delivery advanced as much as 46 cents to $93.82 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.70 at 9:15 a.m. London time. The volume of all futures traded was 22 percent below the 100-day average. The contract increased 66 cents to $93.36 yesterday, the biggest gain since March 26 and the highest close since April 3. Prices dropped 4.7 percent last week.

Brent for May settlement rose 43 cents to $105.09 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $11.39 to WTI futures. The spread was $11.30 at the close of trading yesterday, the narrowest gap since June 22.

Chinese Inflation…”

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Gold Futures Tick a Little Higher as Investors Weigh Data

“Gold futures gained in New York as investors weighed the outlook for continued economic stimulus in the U.S. after jobs data trailed estimates against continued outflows from exchange-traded products.

Gold jumped 1.9 percent on April 5 after U.S. payrolls in March were lower than economists’ expectations, bolstering the case for prolonged central-bank stimulus. Gold holdings in the SPDR Gold Trust, the biggest ETP backed by bullion, fell 0.9 metric ton to 1,205.31 tons as of April 5, the lowest since June 2011.

“What is important for gold at this point is that the recent U.S. economic data has eased the pressure that was weighing heavily on the market last week,” Joni Teves, a London-based analyst at UBS AG, said in a report today. “This should feed into lingering concerns about theU.S. economy and the potential for deterioration in data to push out tapering of QE further into the future.”

Bullion for June delivery rose 0.2 percent to $1,578.40 an ounce by 7:31 a.m. on the Comex in New York. Gold for immediate delivery fell 0.1 percent to $1,578.78 an ounce in London….”

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WTI Continues to Fall Putting in the Largest Weekly Drop Since September

“Crude in New York traded near a two- week low, headed for its biggest weekly drop since September as more talks on Iran’s nuclear program get underway.

West Texas Intermediate futures were little changed, poised for a 4.2 percent loss from the March 28 close, the most since the week ended Sept. 21. World powers and Iran started two-day talks in Kazakhstan and U.S. March payroll data will be released later today. Crude stockpiles in the U.S., the world’s largest crude consumer, gained more than forecast last week, to a 22- year high. Declines in London’s Brent crude may be “overdone,” according to Goldman Sachs Group Inc.

“The market has been a bit negative about payroll figures coming later today, and the surprise could be more on the upside,” said Thina Saltvedt, an analyst at Nordea Bank AG in Oslo.

WTI for May delivery was at $93.12 a barrel in electronic trading on the New York Mercantile Exchange, down 14 cents, at 10:25 a.m. London time. It fell 1.3 percent to $93.26 yesterday, the lowest settlement since March 21.

Brent for May settlement on the London-based ICE Futures Europe exchange was at $106.22 a barrel, down 12 cents. It declined 0.7 percent to $106.34 yesterday, the lowest close since Nov. 2. The futures have fallen 11 percent from this year’s intraday peak of $119.17 on Feb. 8.

The European benchmark grade was at a $13.10 premium to WTI, versus $13.08 yesterday. The spread shrank to $12.66 on April 3, the narrowest since July. The volume of WTI contracts traded was 40 percent below the 100-day average while Brent was 15 percent above.

Brent Recovery

Brent may recover from the recent sell-off as global inventories will remain low and economic growth picks up in the second half of the year, Goldman Sachs said in a report yesterday. The bank maintained its second-quarter price projection at $110 a barrel….”

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Gold Traders Unsure of Direction as Price Action Nears Bear Market Territory

“Gold traders are split on whether bullion will plunge into its first bear market since 2008 as economies improve or rally as central banks buy more debt.

Twelve analysts surveyed by Bloomberg expect prices to rise next week and the same number were bearish. A further three were neutral. Gold slumped to a 10-month low of $1,540.29 an ounce yesterday and investors sold $9.7 billion from exchange-traded products since their holdings reached a record Dec. 20. Hedge funds cut bets on higher prices by 70 percent since October.

Gold’s 12-year bull rally is probably ending as the U.S. leads a global economic recovery, according to banks from Credit Suisse Group AG to Goldman Sachs Group Inc. Commerzbank AG says it’s too early to call an end to the rally and Standard Bank Plc forecasts prices will climb this year as central-bank stimulus and record-low interest rates spur demand for a protection of wealth. The Bank of Japan said yesterday it will double monthly bond buying to bolster the economy.

“The main driver behind gold’s weakness this year has been the focus on global growth and that’s meant rotation out of defensive assets like gold,” said Joni Teves, an analyst at UBS AG in London. “There’s this weak sentiment and it’s been feeding on itself. Central banks continue to pursue exceptionally loose monetary policies and create a still supportive environment for gold.”

Gold Price

The metal fell 7.2 percent to $1,554.66 in London this year. A close at $1,520.18 would be a 20 percent drop from the peak reached in September 2011, the common definition of a bear market. The Standard & Poor’s GSCI gauge of 24 commodities dropped 2.4 percent this year, and the MSCI All-Country World Index (MXWD) of equities gained 4.7 percent. Treasuries are little changed, a Bank of America Corp. index shows…..”

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Europe to Halt 10% of Refinery Production as Gaz Consumption Hitz 19 Year Lows

“Oil refiners in Europe will shut 10 percent of their plants this decade as fuel demand falls to a 19-year low.

Of the region’s 104 facilities, 10 will shut permanently by 2020 from France to Italy to the Czech Republic, a Bloomberg survey of six European refinery executives showed. Oil consumption is headed for a fifth year of declines to the lowest level since 1994, the International Energy Agency estimates. Two-thirds of European refineries lost money in 2011, according to Essar Energy Plc (ESSR), owner of the U.K.’s second-largest plant.

“Purely from the falling European demand point of view, one bigger refinery or two smaller plants would have to shut in Europe every year,” David Wech, who helps advise oil companies and governments as managing director at researcher JBC Energy GmbH, said in a phone interview from Vienna. “And it’s not even assuming any negative impact from more competitive refining markets in other regions.”

A 50 percent jump in three years in U.S. diesel exports coupled with waning demand for imports of European fuels, as well as two recessions in five years in the euro region, have curbed profit from oil products at companies from Italy’s Eni SpA (ENI) to Royal Dutch Shell Plc. (RDSA) Refining margins dropped to $7 this month, from a peak of about $20 a barrel in 2008, according to data compiled by Bloomberg.

The losses are being compounded by the configuration of Europe’s refineries. Most of the plants, more than 50 percent of which were constructed in the wake of World War II, are geared toward gasoline production, though diesel now accounts for 75 percent of the region’s motor fuel needs.

Legacy Sites…”

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Iron Ore Edges Towards a Bear Market as New Supply Comes to Light

Iron ore is heading toward its first surplus in at least a decade as output expands and Chinesesteel mills, the biggest buyers, boost production at the slowest pace in five years.

Seaborne supply will advance 9.1 percent and demand 8.3 percent in 2013, led by exporters from Perth-based Fortescue Metals Group Ltd. (FMG) to Vale SA (VALE5), Morgan Stanley forecasts. A surplus will emerge in 2014 and keep widening until at least 2018, the bank predicts. Prices will slump as much as 34 percent to $90 a ton by the end of December, according to the median of seven analyst estimates compiled by Bloomberg…”

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Corn and Wheat Futures Fall Sharply as USDA Says Stockpiles End Up Higher Than Expected

“CHICAGO—U.S. corn futures fell sharply Thursday after government reports showed higher-than-expected stockpiles, and forecast farmers would plant the largest crop seen in more than 75 years.

The U.S. Department of Agriculture said domestic corn stockpiles reached 5.4 billion bushels as of March 1, well above analysts’ expectations, in a sign that less than expected was used for animal feed, while last year’s harvest may have been larger than originally estimated by the agency.

“The fact that everybody was so completely wrong really suggests that the crop was bigger,” said Bryce Knorr at Farm Futures, a trade publication.

Chicago Board of Trade May corn futures were recently down 40 cents, or 5.4%—the maximum daily change allowed by the exchange—at $6.95 1/4 a bushel….”

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