“West Texas Intermediate oil fell, trimming its ninth weekly gain in 10 weeks. Open interest for the U.S. benchmark grade rose to a record while a report signaled OPEC will cut crude shipments this month.

WTI fell as much 0.7 percent in New York, paring its advance this week to 1.2 percent. Prices gained 0.3 percent yesterday as the number of contracts outstanding rose to the highest level since the futures began trading on the New York Mercantile Exchange in March 1983. OPEC will cut exports by 0.9 percent this month, according to a tanker tracker. Data on U.S. industrial production later today is forecast to show a third- straight month of expansion.

“Fundamentals are acceptably balanced for now,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark.

Crude for March delivery declined as much as 70 cents to $96.61 a barrel in electronic trading in New York and was at $96.83 at 12:52 p.m. London time. The volume of all futures traded was 32 percent above the 100-day average. Prices are 5.5 percent higher this year.

Brent for April settlement fell 38 cents to $117.62 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 25 percent below the 100-day average. The European benchmark grade was at a premium of $20.19 to WTI futures for the same month. The difference was $20.10 yesterday, the narrowest since Feb. 5.

OPEC Cuts…”

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Gasoline down by 803k barrels…

Full report

“U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil.

At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars.

“It really is not supply and demand. It’s definitely speculation,” said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government “stopped Wall Street trading oil.”

It is all very reminiscent of the anger in 2008 when gasoline prices were sent surging by a massive oil spike – also a time when there was a lot of speculative interest from investors.

And yet five years on, there is still no consensus among traders, analysts, and regulators over how big of an impact speculators have on the market – and what, if anything, should be done to limit their participation in oil trading.

Stories about booming U.S. oil production help create expectations among consumers for lower prices. But it remains a global market and the United States is still reliant on around 8 million barrels of crude imports every day.

Hedge funds say they are just an easy target and blaming them ignores global reasons for higher oil prices and the benefits they have brought to the U.S. economy….”

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Source 

Fossil fuels may have met their match in Australia, where wind power has demonstrated itself to be a cheaper source of energy.

New wind farms can supply electricity at a cost of AU$80 per megawatt hour (MWh), compared to AU$143/MWh for new coal-fired power plants and AU$116/MWh for new gas-fired generation, according to research by Bloomberg New Energy Finance.

The calculations included the cost of carbon emissions. But even without a carbon price, wind energy still was 14% cheaper than new coal plants and 18% cheaper than new gas plants.

“The perception that fossil fuels are cheap and renewables are expensive is now out of date,” Michael Liebreich, chief executive of Bloomberg New Energy Finance, told Renew Economy.

“The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” Liebreich added.

Thom Hartman noted at The Smirking Chimp that Australia relies more on coal than any other industrialized nation in the world. “But that coal reliance will soon change, as companies in Australia are quickly adopting new, cheaper renewable energies. As the study found, banks and lending institutions in Australia are now less and less likely to finance new coal plants, because they’ve simply become a bad investment,” he wrote.”

“Copper reached a one-week low in London and zinc fell as inventories remained elevated at a time when the world’s largest consumer of both metals is absent from the market.

Copper stockpiles tracked by the London Metal Exchange touched the highest level since November 2011 and zinc inventories stayed within about 4 percent of an 18-year high, figures showed today. Financial markets in China are shut this week for the Lunar New Year holiday. Euro-area finance ministers met yesterday to discuss aid to Cyprus and Greece.

“Most people wait for the Chinese after the holiday,” Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge Group SA in London, said by e-mail today. “Whether they buy or not would be the focus. Major issues include the European finance ministers’ meeting.”

Copper for delivery in three months slid 0.3 percent to $8,174 a metric ton by 10:23 a.m. on the LME. Prices reached $8,166.25, the lowest since Jan. 31. Copper for March delivery fell 0.3 percent to $3.713 a pound on the Comex in New York….”

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“Humphrey Neill, the father of contrarian analysis, famously wrote that “when everyone thinks alike, everyone is likely to be wrong.”

That’s a sobering thought when it comes to gold, since the belief in gold’s investment virtues seems to be almost universal.

For this column I am taking Neill’s advice to heart, with help from a new study published by the National Bureau of Economic Research in Cambridge, Mass. “The Golden Dilemma,” by Claude Erb, a former commodities portfolio manager for Trust Company of the West, and Campbell Harvey, a finance professor at Duke University, calls the conventional wisdom into question.

I should stress that the study’s authors are not predisposed against gold. For example, Erb told me, he frequently bought and held gold for the commodities portfolio he used to manage. Here’s a summary of the study’s findings:

Gold as inflation hedge

This is perhaps the most widely held belief about gold, and the one that the study’s authors devote the most energy to analyzing. They found that gold does not live up to the widely held belief that gold’s price in real terms remains more or less constant.

Over any of the time periods assumed by investors — from the short term to as long as 20 years — gold’s real price has fluctuated wildly. Interestingly, Erb and Prof. Harvey told me in separate interviews that this finding holds regardless of how inflation is defined — whether it’s based on government data, or the shadow statistics some think are more accurate, or monetary inflation as measured by money supply….”

Full article

“Gold declined to the lowest price this month in New York on speculation that physical demand will slow during this week’s Lunar New Year in Asia.

China, 2011’s second-biggest gold buyer, after India, and most Asian markets are closed for this week’s holiday. Gold is down 1 percent this year after rallying for a 12th straight year in 2012 as nations from the U.S. to China pledged more steps to boost economic growth. Haruhiko Kuroda, one of the potential candidates to head the Bank of Japan, said today in an interview in Tokyo that additional monetary easing can be justified this year.

“The absence of the Chinese market this week means demand from other regions has a larger gap to plug, thus exposing prices to a fragile floor,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. Still, “the broader macro environment remains supportive for prices given low interest rates and global balance sheet expansion.”

Gold futures for April delivery fell 0.5 percent to $1,659 an ounce by 7:47 a.m. on the Comex in New York. Prices reached $1,656.40, the lowest since Jan. 29. Gold for immediate delivery was 0.5 percent lower at $1,658.50 in London.

The London-based World Gold Council is due to release a quarterly report this week that will show nations’ annual bullion demand.

European Ministers…”

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“Brent traded near a nine-month high in London amid concern that tension with Iran may lead to disruption of Middle Eastern exports. Brent’s premium to U.S. crude narrowed for the first time in nine days.

The European benchmark was little changed after rising for a fourth week, the longest run of gains since July. Iran won’t cede to pressure to halt its nuclear work, President Mahmoud Ahmadinejad said yesterday at a rally in Tehran to mark the 34th anniversary of the Islamic Revolution. Egyptian President Mohamed Mursi’s secular opponents geared up for marches today. Bank of America Corp. said there is a “growing risk” the North Sea grade will rally to $130 a barrel.

“The recent move higher for Brent came amid a combination of geopolitical jitters over potential supply disruptions if violence escalates in the Middle East,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.

Brent for March settlement was at $118.31 a barrel, down 59 cents, on the ICE Futures Europe exchange at 11:05 a.m. London time. The number of futures exchanged was 34 percent below the 100-day average. The contract increased $1.66 to $118.90 on Feb. 8, the highest since May 1. The European benchmark grade was at a premium of $22.80 to the U.S. benchmark, WTI. It closed at $23.18 on Feb. 8, the widest since Nov. 26.

The Brent-WTI spread has widened since Enterprise Product Partners LP said Jan. 31 that capacity will be limited until late 2013 on its Seaway pipeline to the Gulf Coast from Cushing, Oklahoma, the delivery point for the New York contract.

China Imports…”

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“Gold may be the most controversial asset class in the global financial markets.

However, many of the conditions that were bullish for gold in the past are looking bullish today.

US Funds Frank Holmes, an expert on commodities, recently presented a monster slide deck that made the ultimate bull case for gold.

Wealth in the gold-loving emerging markets is on the rise and monetary policy continues to be extremely easy around the world. Also, the year after a presidential election is historically a good one for gold.

Holmes has charts illustrating these factors as well as many other factors that might convince you gold is on its way up.

We pulled the 28 very best charts from the 77-slide presentation.

Full article and charts

“Brent crude, headed for a fourth weekly advance, climbed to a nine-month high in London after stronger-than-expected trade data from China, the world’s second-biggest user.

Futures rose to more than $118 a barrel for the first time since May 3, boosting their premium to West Texas Intermediate for an eighth day to the most in almost two months. China’s exports climbed 25 percent in January from a year earlier and crude imports increased to the highest level in eight months, customs figures showed. Oil markets will “remain tight” in the first quarter and may push prices above its forecasts, Goldman Sachs Group Inc. said.

“The numbers out of China are good,” said Nic Brown, head of commodity research at Natixis SA in London, who forecasts that Brent will average $107.40 this year. “China appears to be significantly stronger than even we were expecting. This is a clear upside risk for oil prices.”

Brent for March settlement advanced as much as $1.17, or 1 percent, to $118.41 a barrel on the London-based ICE Futures Europe exchange and was at $118.26 at 11:51 a.m. local time. Volumes were 41 percent more than the 100-day average. The European benchmark grade’s premium to WTI futures widened to as much as $22.05, the most since Dec. 14.

Crude for March delivery on the New York Mercantile Exchange added 44 cents to $96.27 a barrel in electronic trading. The volume of all futures traded was in line with the 100-day average. Prices are down 1.5 percent this week, after advancing 14 percent over the prior eight weeks.

China Trade…”

Full article

“Overall, Gasoline Exports net loss for economic productivity 

The gasoline market is well supplied, but if it weren`t for gasoline exports, the united states would have much cheaper gasoline, and the economy would reap the benefits of cheaper inputs which would fuel greater growth in the US. For example, I imagine college students, truck drivers and small business owners would be much more profitable paying a dollar less per gallon for gas over a year`s time.

Gulf Coast Refiners

The refiners along the gulf coast have a strategic advantage in using the WTI oil input price, making refined products, and then selling them based upon globally benchmarked Brent Oil inputs. So quite the incentive to export as much refined products as possible with these attractive margins.

Econmatters

Consumers vs. Corporations

As with most transactions there are winners and losers, and US consumers are the big loser while refiners and the corporations that own them are the big winners. In short, the US consumer is subsidizing the refiners’ profit margins.

LNG Export Debate  …”

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Distalates down 1 m barrels

Gasoline investories up 1.74 m barrels

“Demand for gold and silver coins is raging, and given the weak outlook for paper currencies, investors should hold on to these coins, says star investor Jim Rogers, chairman of Rogers Holdings.

Gold coin sales hit a 19-month high last month, while silver eagle sales climbed to a record peak.

“You can’t get [silver coins]. They sell out,” Rogers tells Yahoo. “Several mints have run out of coins, … because everybody’s worried about the future of the world.”

Spot gold stood at $1,671.80 late Tuesday, down 13 percent from the record high of $1,921.15, set in September 2011.

Rogers says he “wouldn’t rush in right now” to buy more coins, but would consider purchasing gold if prices fall further.

A correction is likely, he maintains. “Gold has been up 12 years in a row, which is extremely unusual for anything,” Rogers points out.

The long term looks bright for precious metals, he says. “There is no paper money in 2014 or 2015 that will be worth much of anything.”  …”

Read more

“Oil fell to its lowest in 13 days in New York, widening its discount to Brent crude to the most this year. U.S. crude and gasoline stockpiles rose last week, an industry report showed.

West Texas Intermediate futures declined as much as 1.5 percent. WTI’s discount to London-traded Brent widened for a sixth day as limits on the Seaway pipeline cut flows to Gulf Coast refineries. U.S. crude supplies rose by 3.63 million barrels, the American Petroleum Institute said. Energy Department data due today will probably show oil inventories rose to a seven-week high. The U.S. will tighten sanctions on Iran today with measures blocking the exporter from repatriating oil payments in dollars, euros and other hard currencies.

“We’re moving into the refinery maintenance season so that could affect crude stock builds, at the end of this quarter demand should go lower,” said Thina Saltvedt, an analyst at Nordea Bank AG, who predicts that prices will remain supported at current levels by geopolitical concern and improved demand for riskier assets.

Crude for March delivery dropped as much as $1.45 to $95.19 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since Jan. 24, and was at $95.37 at 1:16 p.m. London time. The contract rose 0.5 percent yesterday, the biggest gain since Jan. 29. Prices slid 1.6 percent on Feb. 4, the most since Dec. 6.

Brent for March settlement fell 62 cents to $115.90 a barrel on the London-based ICE Futures Europe exchange. The volume of all WTI contracts traded at that time was 66 percent above the 100-day average, while Brent was 35 percent higher….”

Full article

“Back in December, as always happens every year for the past 3, a margin call driven liquidation wave pushed the price of the gold to multi-month lows, providing merely yet another lowball buying opportunity (for which let’s all thank John Paulson, again). One buyer who certainly would love to thank whichever marginal seller was liquidating their gold, is none other than China, which as was reported a few hours ago, imported an all time record 114.4 tons of gold in the month of December, or more than all the gold held by the Greek central bank (assuming it hasn’t been confiscated by ze Germans or the ECB, or deposited in G-Pap or Venizelos’ private HSBC safe in Geneva yet: a very aggressive assumption).

This means that for all of 2012, total China imports of gold have hit a staggering 834.5 tons, double the 431 tons in 2011, and that the PBOC’s determination, whose official holdings are still a laughable 1054 tons, when in reality they are likely 3-4 times greater, to convert to a commodity-backed currency the day it decides to become the world’s reserves currency, as we predicted back in 2011, is as steadfast as ever.Recall from the December 2009 edition of China Youth Daily, which we reported previously that State Council advisor Ji was saying “that a team of experts from Beijing and Shanghai have set up a “task force” last year to consider growing China’s gold reserves.,,,,”

Full article

“Consumers have been spending more on gasoline than they have in nearly three decades.

With pump prices at their highest level on record for this time of year, the stage is set for a even greater climb in gasoline prices and expenditures than in 2012. Retail gasoline prices have surged 17 cents in a week to top $3.50 a gallon on average, posting the highest prices on record for the beginning of February.

According to AAA, the national average price of regular gasoline is $3.52 a gallon, 4 cents higher than the average price a year ago. The average price was $3.35 a gallon a week ago and $3.30 a gallon a month ago.

Meanwhile, the U.S. Energy Information Administration reported Monday that gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4 percent of income before taxes. This was the highest estimated percentage of household income spent on gasoline in nearly three decades, with the exception of 2008, when the average household spent a similar amount. Gasoline prices averaged $3.63 a gallon in 2012, according to EIA.

Although overall gasoline consumption has decreased in recent years, a rise in average gasoline prices has led to higher overall household gasoline expenditures, according to the EIA….”

Full article

“Zinc fell from a one-year high in London and copper erased a gain as European equities slid amid concern about a revival of the region’s sovereign-debt crisis.

The Stoxx 600 Europe Index of shares declined as much as 0.6 percent and the euro weakened against the dollar. Spanish and Italian bonds retreated amid signs of political turmoil in the countries. A gauge of euro-area manufacturing released Feb. 1 by Markit Economics was below the level of 50 separating contraction and expansion for an 18th month in January.

“Obviously there are key risks, such as the potential for another sovereign crisis in Europe,” Nicholas Brooks, head of research and investment strategy at ETF Securities, said by phone today.

Zinc for delivery in three months dropped 0.4 percent to $2,167.50 a metric ton on the London Metal Exchange by 7:52 a.m. New York time. Prices reached $2,190, the highest since Jan. 27, 2012. Copper for delivery in three months declined 0.1 percent to $8,271 a ton, while the metal for delivery in March fell 0.5 percent to $3.767 a pound on the Comex in New York….”

Full article

“Platinum rallied to the highest price in almost four months on concern output in South Africa continues to struggle amid rising demand. Gold fell as the U.S. dollar strengthened.

Anglo American Platinum Ltd. (AMS), the world’s biggest producer, today reported a loss for 2012 as output of refined metal dropped 8.8 percent while costs surged and warned “supply challenges” will continue this year. Global platinum supply fell 10 percent last year because of strikes, stoppages and shaft closings in South Africa, which accounts for 72 percent of global output, Johnson Matthey Plc estimates.

“The South African supply pipeline will remain rather unreliable over the course of the year,”Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a report e- mailed today. “More importantly, platinum is expected to be in deficit this year, with demand expected to remain strong on account of strong car sales we are seeing in a number of markets.”

Platinum for immediate delivery increased 0.9 percent to $1,698.28 an ounce by 10:44 a.m. inLondon. It jumped as much as 1.5 percent to $1,708.19 an ounce, the highest price since Oct. 9. Gold for immediate delivery fell 0.1 percent to $1,665.49 an ounce.

Platinum and related metals may have so-called price spikes this year and next on growing demand and a lack of investment in mines, JPMorgan Chase & Co. said on Jan. 31. Autocatalysts account for 33 percent of global demand, while industrial applications make up 28 percent of usage, according to Johnson Matthey.

Car Sales…”

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“U.S. drivers are now paying more to fill up their gas tanks than they ever have at this time of year.

The national average price of retail gasoline posted its biggest one-day increase in 23 months on Friday, rising four cents to $3.46 a gallon, according to AAA. The average price has risen 13 cents — a 4 percent increase — in the past week.

Gasoline prices have followed in part the climb in the stock and oil prices. Oil and equities have risen sharply over the last few weeks, as the Dow Jones Industrial Average reached 14,000 for the first time since 2007, Brent crude oil futures hit at 4-month high near $117 a barrel, while the U.S. oil price is near $98 a barrel.

Retail gasoline prices have also hit a new milestone.

“This is the highest price record for February 1st,” says OPIS analyst Tom Kloza, who predicts the national average price of regular gasoline will climb a few more pennies to $3.50 a gallon this weekend.

NYMEX March RBOB gasoline futures, which help determine prices at the pump, have risen 10 percent in the past two weeks, finishing the week at $3.05 a gallon on Friday….”

Full article

“Gold swung between gains and declines in London, after dropping for a fourth consecutive month, as investors weighed expectations of increased hiring in the U.S. against the need for more stimulus….”

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“Oil headed for the longest run of weekly gains in more than eight years in New York before a report that may show the U.S. added jobs last month, signaling economic recovery in the world’s biggest crude consumer.

West Texas Intermediate, little changed today, is poised for an eighth weekly advance, the most extensive since August 2004. U.S. employers probably added 165,000 workers last month after a 155,000 increase in December, according to a Bloomberg News survey before Labor Department data. Israeli jets hit Syrian trucks carrying anti-aircraft missiles for the Islamic militant group Hezbollah Jan. 29, according to an official who asked not to be named…”

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