Mines- Prices- Markets

Oil, Gas Industry Fears More Deep-Sea Leaks Killing Fields

2013-09-06T21:18:00.001-07:00

Oil, Gas Industry Fears More Deep-Sea Leaks Killing Fields

The corrosive fluids implicated in the leak at Total's Elgin field, such as calcium bromide, are commonly used in such deep-sea wells, and experts fear a recurrence as operators, under pressure to offset declining output from conventional reservoirs, turn to deeper, hotter and higher pressure fields.

A corrosive drilling fluid that triggered the North Sea's worst gas leak in 20 years could threaten similar deep-sea wells across the world, and operator Total has already warned Shell that its nearby Shearwater field may be at risk

Drilling engineers, equipment manufacturers and chemical experts say the long-term consequences of exposing well casings to bromide-based fluids are poorly understood, and some corrosive bromide fluids have already been banned.

"It's an operational well, and there are hundreds of thousands of those out there, and any one of them at any time potentially could suffer from the sort of problem Elgin has apparently had, so we need to know about it as an industry," said Liane Smith, founder of well integrity specialist Intetech, recently acquired by Wood Group.

The G4 well in the Elgin field leaked for a month and a half, creating a huge cloud of flammable gas above the platform about 150 miles (240 km) east of Aberdeen in Scotland.

The leak pushed up gas prices and cut UK supply by 7 percent. An air and sea exclusion zone was imposed as personnel were evacuated from the area. Had the gas cloud caught fire, the results would have been devastating.

Total has said the leak was caused by a corrosive reaction between calcium bromide used to complete the well and grease in the pipework, which under high pressure cracked the piping. The French firm described it as a "unique event".

Calcium bromide is not generally regarded as corrosive and is still widely used in the North Sea, but Reuters uncovered a number of historical cases in which chemically related fluids known as halides, such as zinc bromide and calcium chloride, have corroded pipework.

Halide fluids, known as brines, can react with oxygen, carbon dioxide or hydrogen to form a corrosive substance, particularly in deep wells such as Elgin where temperatures can reach 200 degrees Celsius.

"Bromide belongs to the same group as chloride, and so there is always the risk of halide cracking of susceptible steels. If the steels used are susceptible to chloride cracking, they will also be at risk of bromide cracking," said Paul Rostron, professor of corrosion chemistry at the Petroleum Institute in the United Arab Emirates.

In 1999 piping in a well on the HPHT Erskine field, operated at the time by Texaco and now by Chevron, cracked after calcium chloride reacted with air to corrode the steel.

Zinc bromide is also known to be increasingly corrosive at high temperatures and its use is banned in the North Sea because it is regarded as dangerous.

"Zinc bromide and other bromides are highly corrosive to any form of steel it comes into contact with," said consultant Downs.

KILLING FIELDS

Total has explained how gas got into the Elgin well, but the company has stayed silent on how it breached three further well walls after its initial point of entry.

Industry insiders want to see a wider discussion in petroleum journals and at conferences. If a scenario has been discovered in which calcium bromide becomes dangerously corrosive, the information must be shared, they said.

"They need to tell us what we need to keep out of our wells so that we don't stupidly go and do the same thing again," a corrosion engineer told Reuters. He declined to be named lest his comments affect his relationship with clients.

Total says it has shared the information with operators.

"Before we can publish scientific papers we want to reproduce what happened in a laboratory," Total's de Vivies said.

Total Chief Executive Christophe de Margerie said: "The final conclusion hasn't yet been released because it is not yet over, and there are talks to understand everything that happened and everything that could happen in the future."

Britain's HSE and Total have conducted separate investigations into what happened at Elgin.

The HSE investigation will soon be sent to authorities in Scotland where a decision will be taken on whether to prosecute Total over the incident. Until such time, the HSE investigation cannot be released, a spokesman from the watchdog said.

While the rest of the industry waits to find out what caused the leak, Total is taking pre-emptive action.

"In the light of the lessons drawn from the G4 accident, we have redefined the technical requirements our wells must meet, and the consequence is that a minimum of 10 wells will have to be killed," Yves-Louis Darricarrere, head of E&P at Total, told Reuters in March.

The process will take about three years to complete, and the replacement cost of each well is about 140 million pounds, said a source with direct knowledge of the abandonment procedure.

"Total took a very conservative approach to the remaining Elgin wells," said the source.

Oil Market Forecast & Review September 2013

2013-09-06T21:03:00.001-07:00

Oil Market Forecast & Review September 2013

Crude oil prices fell since the market is dollar-denominated. Later in the session, a stronger than expected ISM Services PMI report sent the dollar even higher, but crude oil traders did not sell. This was further proof that investors were more concerned over a military intervention against Syria’s government rather than supply/demand issues at this time. October Crude Oil futures traded slightly lower on Thursday because of a stronger dollar, but bearish traders were unable to break the market because of concerns over an impending invasion of Syria by the U.S.

Although the market remained lower for the session, investors continue to push the market away from the low of the day shortly after the government announced a decline in crude oil supplies last week. According to the Energy Department’s Energy Information Administration, crude oil supplies dropped by 1.8 million barrels to 360.2 million barrels.

Although this number was above year-ago levels, speculators supported the market because of the possibility of military action against Syria late next week. Dallas and Houston's annual job growth rates ranked first and second among the largest metropolitan areas in July. From July 2012 to July 2013, local nonfarm employment in Dallas rose 3.7 percent, more than twice the national increase of 1.7 percent, reported the U.S. Bureau of Labor Statistics. That among the 12 largest metropolitan areas in the country, Dallas ranked the first in the rate of job growth, noted Regional Commissioner Stanley W. Suchman.

The Dallas-Plano-Irving Metropolitan Division, which accounted for 70 percent of the area's workforce, added 77,500 jobs from July a year ago, a gain of 3.7 percent. Houston closely followed, up 3.6 percent.

"Many sectors are showing renewed signs of life, as we see job growth across the board," said Perez. "But we have to do more to pick up the pace of this recovery. We are not satisfied with an economy performing at anything less than its full potential. President Obama has proposed a better bargain for the middle class that will invigorate the economy and create jobs at a faster clip."

outlook crude oil estimated 2035

2013-07-11T20:55:00.003-07:00

outlook crude oil estimated 2035

There are other sources of crude oil that could be developed preferentially over heavy crude. These include shale oil, which is rapidly increasing production in North America, the low-cost resources in Iraq and Brazilian pre-salt discoveries. Because costs are so important, this outlook presents cost data in detail for Canadian oil Sands and for the Orinoco Belt in Venezuela, the two most important sources of incremental non-conventional heavy crude production. Costs were also compiled for shale oil, Brazilian pre-salt developments, and Middle Eastern heavy and mediumheavy oil developments which are representative of the costs in the region.

Country Projects Initial Investment (US$ Million) Initial Reserves (Million Barrels) $ per barrel

Canada     Oil Sands Average     3,731     578     8.10
Venezuela     Orinoco Belt Average     14,932     1,207     14.94
Congo     Tchikatanga-Makolas     4,290     150     28.60
United States     Nikaitchuq Offshore Alaska     2,000     220     9.09
U.K. North Sea     Mariner and Bressay     10,700     600     17.83
Iran     South Azadegan     2,000     1,640     1.22
Saudi Arabia     Manifa     11,000     10,000     1.10
Brazil     Papa Terra     5,200     380     13.68
Brazil     Pre-Salt     250,000     14,300     17.48
United States     Shale Oil Wells Average     7.61     0.525     14.49

Source: Hart Energy complied from operating company information

The initial investment, estimated reserves and the cost in US$ per barrel of reserves are tabulated for selected projects in Table I.1. The first three are non-conventional bitumen and extra-heavy crude developments; for the Canadian and Venezuelan projects, the costs are the average of the projects analyzed in this report. The next six are conventional heavy oil projects by definition but, with the exception of the two Middle Eastern projects, are located offshore in deep water or in harsh environments. The last two are light oil. The Brazilian pre-salt reservoirs are located in over 7,000 feet of water and another 16,000 to 17,000 feet below the seabed. Shale oil is a non-conventional source that is rapidly increasing supplies in North America. Such resources are located in every region of the world and appear to be cost competitive with other non-conventional sources.

As Table I.1 indicates, non-conventional extra-heavy oil and bitumen in Venezuela and Canada are no more costly than pre-salt oil and shale oil. The project in Congo is more costly because of the remote location and lack of infrastructure. The offshore conventional heavy oil developments in the North Sea and Brazil cost more but are still competitive. Thus, cost alone will not defer heavy oil development. Other factors such as external energy and water use, with the associated environmental impacts, could serve to deter investment in heavy oil in some parts of the world. However, the primary factor in whether heavy oil is developed at the pace suggested in the longterm outlook of this report will depend on how fast oil demand continues to grow, the oil price and how fast new light oil sources, such as Iraq and the Brazilian pre-salt developments, come online.

The volume of heavy oil entering the export market increases to 4.5 million b/d by 2015 and declines thereafter in the short- and medium-term project scenario as more producing countries increase heavy oil processing capacity. The heavy crude on the export market decreases to 4.3 million b/d by 2020 and 3.3 million b/d by 2030. In the long-term scenario, heavy crude entering the export market continues to increase, despite growing domestic processing capacity in producing countries, reaching 6.0 million b/d by 2025 and remaining at approximately that level through 2035.

oil prices and production prediction 2035

2013-07-11T20:35:00.001-07:00

oil prices and production prediction 2035

While oil demand grew faster than expected in 2010, it is growing more slowly in 2011. Actual oil demand growth in 2010 was higher than forecasted at the beginning of the year, causing the International Energy Agency (IEA) to revise its outlook upward by 300,000 b/d for 2011. In August 2011, the agency tempered its growth expectations by revising its forecast downward by 100,000 b/d, citing several of the aforementioned factors. OPEC also revised its forecast downward by 150,000 b/d. Though the downgrades represent only a fraction of the average 88.1 million b/d OPEC expects to be consumed this year worldwide, or the 89.5 million b/d expected by the IEA, they cast doubt on future demand projections

In this context of economic volatility, the outlook for heavy crude oil production also faces uncertainty. Thus, this edition of Hart Energy's Global Heavy Oil Outlook presents two outlooks: the first considers only existing production and new projects that are in advanced planning stages and reasonably certain to be developed by 2020; the second is a scenario in which heavy oil development continues beyond 2020 with ventures that are less certain, such as numerous announced Canadian oil sands projects, heavy oil developments in Africa and ongoing development in the Venezuelan Orinoco Belt. The long term also includes speculative developments of U.S. bitumen resources and new discoveries in Africa and Mexico.

In the short- and medium-term outlook, heavy crude oil production peaks at 12.3 million b/d in 2020, remains at this level through 2025 and declines thereafter. The region with the highest growth is the Middle East at 1.2 million b/d because of low-cost new heavy oil production in Iraq and Iran, and also Kuwait and the Partitioned Neutral Zone between Kuwait and Saudi Arabia. North American heavy oil output increases by 800,000 b/d, followed closely by South America at 770,000 b/d. Small increases in heavy oil production are expected in Asia and Africa, while Europe, Russia and Central Asia decline.

When long-term projects are included, heavy oil production continues to grow significantly beyond 2020, reaching 16 million b/d by 2025 and remaining at this level through 2035. Most of this growth comes from Canada and Venezuela, with smaller contributions from Ecuador and Mexico, for a total incremental production from the Americas at 2.7 million b/d in 2025 and increasing to 4.2 million b/d by 2035. New projects in Africa and China together contribute 1.0 million b/d to the long-term outlook. Most of the long-term incremental production is nonconventional heavy oil – 70% in 2025 and 77% in 2035. Depending on demand growth and how much additional light oil resources are developed, the long-term heavy oil outlook could result in excess crude oil supply between 2020 and 2025.

oil prices markets effect on obamas winning 2012

2012-11-07T21:24:00.000-08:00

oil prices markets effect on obamas winning 2012

Dow ends down 313 points after Obama win

NEW YORK — Stocks ended sharply lower Wednesday, one day after the re-election of President Obama. The Dow Jones industrial average closed down about 313 points, or 2.4%.

Investor reaction is decidedly negative over the defeat of the more business-friendly Mitt Romney and the continued gridlock in Congress that makes it tough for lawmakers to avert a fiscal policy crisis by year-end.

The benchmark Dow remains below the psychologically significant 13,000, not seen since Aug. 3. The Standard & Poor's 500 index and Nasdaq composite index ended down 2.3% and 2.5%, respectively, with stocks in nearly every industry lower.

DON'T PANIC: Sell for good reasons, like these

TRACK STOCKS: Get real-time quotes with our free Portfolio Tracker

The Dow, which settled at 12,933, had its lowest close since Aug. 2; the S&P 500 and Nasdaq had their lowest closes since Aug. 6.

Wall Street pros said negative sentiment was amplified Wednesday after European Central Bank President Mario Draghi expressed concerns ahead of the U.S. market open about the outlook for Europe's economies, especially Germany.

Others said much of the sell-off is coming from computerized trading programs, which trigger huge sell-offs of stocks at pre-set prices hit versus investors making decisions on the spot about what they think of a stock's outlook. One exception: Apple (AAPL) shares closed at $558.13, off 3.8% Wednesday. That puts the computer and gadget maker in correction territory, which is still about off 20% from its September intraday high $705.07 a share.

Worries over U.S. fiscal cliff, European debt push stocks lower

Shares on world markets slumped and the euro slid further on Wednesday as investors worried that the fiscal challenges facing U.S. President Barack a day after his re-election could lead to a new recession.

Fresh concerns about Europe’s debt crisis and economic weakness added to the jitters among investors, who scrambled for safer assets. Benchmark U.S. Treasury yields were set for their biggest one-day fall since May.

Crude Oil is the Most Actively Traded Commodity

2012-11-07T21:03:00.000-08:00

Crude Oil

Crude oil is the most actively traded commodity and its makes up the largest component of world trade. It represent the lifeblood our complex economy. Crude oil is made into gasoline, airplane fuel, diesel fuel and it powers our cars, planes, trains, busses and it is an essential component for making plastic.

What is crude oil and where does crude oil come from?

Crude Oil, also referred to as “black-gold”, is a smelly yellow-black liquid found underground in reservoirs. Crude oil comes from the remains of small plants and animals that died millions of years ago. After the organisms died, they sank into the sand and mud at the bottom of the sea. Over the years, the organisms decayed in the sedimentary layers. In these layers, there was little or no oxygen present. So microorganisms broke the remains into carbon rich compounds that formed organic layers. Layer on top of layer was added and caused heat and pressure to refine the organic material into crude oil and natural gas.

Different types of crude oil?

There are different types of crude oil and they contain a different chemical makeup depending on the types of plants and animals that created the crude oil reservoir. Primarily, crude oil is made up of hydrocarbons, plus a variety of other chemical compounds, depending on the region. Some crude oil contains lots of sulfur and is “sour” while oil with little sulfur is called “sweet crude”. Crude oil can also be thicker (light crude) or thinner (heavy crude) depending on its location. Light Sweet crude oil is priced at a higher rate and is easier to refine and has fewer environmental problems than heavy sour crude oil.

Where is crude oil found?

Crude oil is found all around the world. Leading producers of crude oil include Russia, followed by Saudi Arabia, the United States, Iran and China. Within the United States, Alaska and Texas are the top producers of crude oil. California, Oklahoma and Louisiana are also major producers, as are the offshore drilling sites in the Gulf of Mexico.

In spite of oils importance to our way of life publically traded companies such as BP, Shell, Exxon Mobile, and Chevron only controls around 15% of the world’s reserves. The other 85% is controlled by governments and state held companies.

New discoveries are few and far between. This has caused many oil companies to drill for oil in unfriendly territories.

Have we research the peak?

This is a much debated subject. The idea of “peak oil” was first introduced by M. King Hubbert, a geophysicist working for Shell Oil Company. His theory said that the production of oil in a field, a country, or the entire planet would look like a bell curve. It would increase until it hits it peak and it thereafter forever fall. In 1956 he made a prediction that the US oil production would peak around the late 1960s and early 1970s and then go into a decline. He was dismissed at the time but as production in the US peaked out in the 1970 his prediction 14 years earlier proved to be correct.

Many of the enormous oil fields that were discovered and developed in the 1970s are in decline. The North Sea hit its peak in the mid 1980s and has since been in decline. In 2000 the decline was accelerated.

One of the world’s last giant oil fields was discovered in Mexico. The Cantarell field in Mexico was discovered in 1975. This made Mexico into a large oil producer. However, by 2003 the field had already started declining.

In 2008 the average field declined by 5 percent. As a result water has been pumped into the ground to keep pressure up along with many other oil recovery techniques to reduce the rate of decline.

New Oil Discoveries

There are both small and large discoveries of oil happening all the time. However, one problem is that the only large discoveries within the last decade have been in geographically undesirable locations to say the least.

In northern Canada large oil reserves in form of oil tar sands has been found. The reserves of oil tar sand available in Canada are massive and rank close behind Saudi Arabia. However, getting all this oil out of the ground is and highly energy intensive and expensive. To make this operation profitable oil needs to stay at a high price.

Other large oil fields were discovered in the deep waters outside Brazil. These three oil fields called Tupi, Jupiter, and Sugar Loaf was found 180 miles outside the coast of Rio de Janeiro. It is estimated that they contain around 80 billion barrels of oil, enough to make Brazil a major oil producer. The problem with these discoveries is that the oil is 2.5 miles below the seabed making it very difficult and expensive to bring the oil up to the surface. Without consistently high prices these fields will not be profitable.

Moving Forward

According to the International Energy Agency (IEA) the world’s production from current fields is expected to decline without new discoveries. There is still many oil reserves available but one problem is that they are hard to get to and expensive to develop.

With lagging production and new demand from China and emerging economies we are likely to see shortages and higher prices as countries will start competing for scarce resources. Unless more oil is found quickly or inexpensive and reliable alternative fuels are developed the world will see ever higher oil prices.

Top World crude oil producers / consumers
(Thousand Barrels per Day)
Country    Production               Country                       Consumption
1 Russia                             9,934       1 United States                       18,810
2 Saudi Arabia                   9,760       2 China                                    8,324
3 United States                  9,141                       3 Japan                                    4,443
4 Iran                                4,177                       4 India                                      3,110
5 China                             3,996                       5 Russia                                    2,740
6 Canada                          3,294                       6 Brazil                                     2,522
7 Mexico                          3,001                       7 Germany                                2,440
8 UAE                              2,795                       8 Saudi Arabia                          2,438
9 Brazil                              2,577                      9 South Korea                           2,185
10 Kuwait          2,496                     10 Canada                 2,151
11 Venezuela     2,471    11 Mexico    2,084
12 Iraq     2,400    12 France    1,828
13 Norway    2,350    13 Iran    1,691
14 Nigeria     2,211    14 UK    1,667
15 Algeria     2,126    15 Italy    1,528
The data is from 2009 and gathered from the Energy Information Administration (EIA)

Top World crude oil Importers / Exporters
(Thousand Barrels per Day)
Country     Imports     Country     Exports
1 United States    9,669    1 Saudi Arabia    7,322
2 China    4,328    2 Russia    7,194
3 Japan    4,311    3 Iran    2,486
4 Germany    2,307    4 UAE    2,303
5 India    2,233    5 Norway    2,132
6 South Korea    2,139    6 Kuwait    2,124
7 France    1,749    7 Nigeria    1,939
8 UK    1,588    8 Angola    1,878
9 Spain    1,439    9 Algeria    1,807
10 Italy    1,381    10 Iraq    1,764
11 Netherlands    1,122    11 Venezuela    1,748
12 Taiwan    944    12 Libya    1,525
13 Singapore    916    13 Kazakhstan    1,299
14 Thailand    601    14 Canada    1,144
15 Belgium    597    15 Qatar    1,066
The data is from 2009 and gathered from the Energy Information Administration (EIA)

golds prices effect on obama winnings 2012

2012-11-07T20:50:00.000-08:00

golds prices effect on obama winnings 2012

Price of the yellow metal surged on Wednesday, but customers undeterred

Gold prices in Chennai surged, as Barack Obama was re-elected President of the Unites States.

As America reaffirmed its confidence in its President, the promise of continuity in his monetary policies for the globe, drove the price of the precious metal up — one gram of 22-carat gold was priced at Rs. 2,939 on Wednesday, Rs. 41 more than Tuesday’s price.

Up until Monday, gold prices had been dipping steadily, but when the US election results came in on Wednesday, they shot up. In just two days, the cost of a sovereign of gold (8 grams) went up by Rs. 632 and was sold at Rs. 23,512 on Wednesday evening.

The sudden hike in prices left many customers, who had wanted to reap the benefit of the falling costs, perturbed.

Jewellers in the city said that Obama’s win, and expectations of strong monetary policies, would prove advantageous for gold over the dollar in investment.

“We depend on international prices as our country largely imports gold. A change in governance would have lead to further strengthening of the US dollar and gold’s value would have weakened,” said N. Ananthapadmanabhan, regional chairman of All India Gems and Jewellery Trade Federation.

For customers, it meant shelling out more money for less gold. S. Venugopal, a resident of Purasawalkam said: “I wanted to invest in gold coins as the price was decreasing. I was disappointed at the increase by nearly Rs. 80 per gram in two days. I bought some coins as the price may further go up as it is the festive season.”

According to jewellers, the increase in price has not affected business, as people are buying up the precious metal fearing a further rise. Jayanthilal Chalani, president of Madras Jewellers and Diamond Merchants Association, said that the number of customers who exchange old jewellery is still low, as the price of gold is still relatively lower than what it was in September. Several customers prefer to buy light-weight jewellery and gold coins, he said. The yellow metal is expected to cost more by this year-end.

The cost of silver too, went up marginally. One gram of silver was priced at Rs. 64.60 on Wednesday compared to Rs. 63.10 on Tuesday. Jewellers said silver is growing to be the best choice of investment in metals after gold. Platinum jewellery has not as lured many customers as there is not much resale value, jewellers added.

GOLD PRICE NEWS – The gold price held steady near $1,715 per ounce on Wednesday morning despite widespread liquidation across financial markets in the aftermath of U.S. President Barack Obama’s election win. The spot price of gold climbed to an overnight high of $1,733, but fell back toward unchanged as the U.S. dollar rallied and the large majority of the commodities complex turned sharply lower.
With Obama winning his re-election bid, the focus in Washington, D.C. is now likely to shift to the looming fiscal cliff – a series of tax increases and spending cuts that are scheduled to take effect at the start of 2013. As was the case last time the U.S. debt ceiling was a major headwind – in the summer of 2011 – the gold price has once again begun to display a considerable amount of resiliency in the face of broad-based weakness in U.S. dollar-denominated asset classes.
UBS precious metals strategist Edel Tully contended that “All in all, gold could not have asked for a better outcome” from the U.S. election.

RESOURCES
http://www.thehindu.com/ http://www.goldalert.com/

OPEC, which produces a third of the world's crude oil demand estimated 2013

2012-09-11T22:11:00.001-07:00

OPEC, which produces a third of the world's crude oil demand estimated 2013

OPEC on Tuesday slightly raised its forecast for oil demand in 2012 following a small increase in U.S. consumption and increased "dramatically" Indian demand after a massive power outage in July.

Organization of Petroleum Exporting Countries (OPEC) predicted in its latest monthly report, global oil demand in 2012 amounted to 88.74 million barrels per day (bpd), up from a previous estimate of 88.72 million barrels per harih, and higher than 87, 89 million barrels per day in 2011.

"Turbulence world economy does not slow down the oil consumption of the seasonal trend of the summer," OPEC said. "Not only did U.S. oil consumption grew slightly, but the Indian oil demand to grow dramatically."

OPEC said that demand for diesel oil India "bounce" to the level of "strong" in late July, after the flood and the death of three national electricity grid that crippled more than half of the country, affecting more than 600 million people.

In addition, the closure of most of Japan's nuclear power plants after the Fukushima disaster in March 2011 has encouraged "excessive use of crude oil and fuel oil during the summer," OPEC said.

For the 2013 OPEC, which produces a third of the world's crude oil demand estimated to be 89.55 million barrels per day, up slightly from their previous projection of 89.52 million barrels per day, but reflects a growth rate slightly weaker than in 2012.

"Economic picture is not clear (for 2013) and there are many potential uncertainties ahead," said the monthly report.

Michelle Obama Speech ....... impact on economyc , free markets

2012-09-06T03:48:00.002-07:00

Michelle Obama Speech ....... impact on economyc , free markets

In her speech yesterday, Michelle Obama talked in personal terms about her own and President Obama’s modest upbringings. She discussed her own father’s struggles as a pump operator to put her through school and Obama’s grandmother and single mother, who suffered pay discrimination. She talked about how student loans enabled both Obamas to eventually enjoy lucrative careers.

“When it comes to rebuilding our economy, Barack is thinking about folks like my dad and like his grandmother,” Ms. Obama said.

This biographical detail has been widely interpreted as an effort to forge an emotional bond with working and middle class Americans — a reminder that the Obamas have experienced what they have, while the Romney’s haven’t.

But it’s also worth noting that the implicit biographical contrast Ms. Obama drew here is directly relevant to one of the central policy disputes of this campaign — the argument over how best to create opportunity and shared prosperity.

How should we rebuild our economy to create opportunity for those who lack it? The two candidates have starkly different answers to this question. Romney believes the best way to promote opportunity is to unshackle the free market, which will enable people to realize their potential and shower everyone with prosperity. His running mate’s fiscal vision entails deep cuts to education and financial aid for students. Romney has counseled struggling students to shop around and borrow money from their parents. Obama derides this as “you’re on your own economics” and says recent history has shown this to be a sham.

Obama, meanwhile, is arguing for a larger governmental role in facilitating opportunity, through more investment in education and financial aid and other judicious government intervention in the economy. Romney derides this as favoring government-enforced “equal outcomes” and claims Obama’s argument for government support is demeaning of individual initiative as a factor in people’s success.

Romney cites his own success as proof of what the private sector can shower on people if only we allow it to. Obama, too, has cited himself as the type of person who needed assistance in order to fully realize his potential; Ms. Obama’s speech fleshed that out last night. In other words, both cite their own successes in making the case for how to make the economy work for everyone. But the key difference is that Romney went on to enormous success after growing up amid far more comfortable circumstances than the Obamas did.

Michelle Obama’s speech wasn’t just about emotionally connecting with the middle class. It was about driving home that she and Barack have lived through some of the same life experiences as the people who are at the center of the campaign’s policy dispute over how to promote social mobility, shared prosperity, and economic security.

This isn’t to detract in any way from Romney’s achievements; he seems to be an extremely hard worker with a great deal of self-discipline. Rather, the point is that if both are going to cite their own stories as proof that their vision is the best way to promote opportunity and mobility for those who lack it, the Obamas have a far more relevant tale to tell.

Charles Krauthammer: Her whole task was to say why. And her answer was, “Why? Because essentially he's a saint.” Because of his upbringing and because of his emotions and because of his humanity. He does of this because he cares. And the brilliance of it is this: It drained Obama of any, either, ideological motivation, or any having to do with self interest or ambition, which I think is sort of a more plausible explanation.

He's a man highly who is liked and highly ideological. A man of the left who sees the role of the government as ordering, the reorderering, of society in a way to make it more just, as he understands it . And also, extremely ambitious. A self made man who makes himself out of nothing, rises out of nowhere. But all of that, in her telling, doesn’t even exist. The only reason he does what he does, he cares about women, he cares about immigrants, he cares about the poor. He cares about the unemployed. He cares, he cares, he cares.

She told the story of a Gandhi. And, you know, looking at the scene, looking at how he's conducted himself in the presidency and particularly in the campaign, with ruthlessness and determination and drive, it’s not quite a plausible story. I’m sure in the arena, it was a plausible story. I saw the tears, but I’m afraid, I thought it was a great speech, but I didn't buy a line of it.

8 Different Factors of A Valuation model for Gold Mining Stocks

2012-09-04T19:45:00.003-07:00

8 Different Factors of A Valuation model for Gold Mining Stocks

Gold mining stocks can be very profitable especially during secular bull markets but this asset class is by nature very volatile. Gold mining stocks have different characteristics from general equities and traditional measures such as P/E ratios don’t do well in assessing the true value of the company. Other factors such as company cost, production rates, and development trends are more important. Bud Conrad at Casey Research has created a model of how to analyze gold mining stocks based on 8 different factors:

Proven and Probable Reserves – Total amount the mine is expected to produce.

Cash Cost per Ounce – The cost per ounce the company expects to pay for labor, equipment, etc to take the reserves out of the ground and to the market place.

Mine Asset Value – The difference of the price of gold today and the production cost per ounce multiplied by total reserves.

Debt – Total debt of the mine. Mines are very expensive and most borrow to start production.

Hedge Liability – An obligation the mine has to deliver gold at a future price that is below the market price.

Mine Asset Value – The Mine Asset value minus Debt and minus Hedge Liability.

Market Cap – The total amount of shares outstanding multiplied by its share price.

Gold-Valuation-Table

The purpose of Bud Conrad’s model is to compare the gold reserves in the ground to the stock price to see whether the price is low enough to be attractive. The table below compares the value of different gold mining companies. The far right column shows the valuation ratio. A ratio of 1.0 indicates that a company’s stock may be expensive compared to its assets and a value of closer to zero indicates a bargain.

The valuation provides a basic guide line of value but it will change as conditions change. The valuation of certain stocks will change more or less from company to company depending on the change in price of gold and the company stock

Risk Factor of Gold Mining Stocks

2012-09-04T19:28:00.001-07:00

Risk Factor of Gold Mining Stocks

Here are five factors suggested by Casey Research to consider before buying gold mining companies:

Cash flow – Does the company have strong cash flow and cash reserves?

Income generation – Does the company have good income from producing gold out of the earth and what is the cash cost per ounce?

The quantity of proven or measured reserves in the ground – How much of the gold in the ground has a 90% chance of recovery?

Little or no hedging – How much hedging is the company involved in? Some companies hedge to raise capital but this often proven to be a bad long term strategy.

Low debt levels – Nothing gets a company in more trouble than too much debt.

Junior and Senior Mining Gold Companies

Junior gold mining stocks offer more upside potential but they are also more risky. Unless you are really an expert in the mining industry it is suggested that a portfolio only include about 5-10% of junior mining companies. A safer bet is to add physical gold and senior mining companies.

Junior mining companies are characterized as small scale production mine with revenue or an exploration company with no revenue. Exploration companies have more risk because they quickly burn through a lot of cash trying to discover large gold deposits. Senior gold mining companies are less risky as they sit on vast reserves and have developed mines with a steady revenue stream.

However, junior exploration companies are a major source of new supply. They find new attractive land, determine whether a property is economically viable, and bring mines into production. They are critical for finding new discoveries and offer more growth potential.

Gold Bullion Several Different Ways of Buying Gold.

2012-09-04T05:57:00.003-07:00

Gold Bullion Several Different Ways of Buying Gold.

Gold Bullion is valuable precious metal - namely gold or silver. It comes in two main forms :- Gold bullion bars, and Gold bullion coins. What makes it gold bullion is simply that its value derives entirely from its precious metal content.

Unlike jewelry, or numismatic coins, gold bullion has no artistic component in its value. Some people do not understand why without that artistic component a relatively useless material like gold should have such a high value. To understand that you need to understand gold's monetary role.

If you want to buy some gold bullion these days it is relatively easy to do so. Learn how.

Gold Eagle

Gold bullion coins trade quite close to the world gold price, but you will still pay a premium of perhaps 4% when you buy in quantity, and usually 8% when you buy smaller amounts. You should expect to suffer a similar 4-8% discount when you sell gold bullion coins back to the dealers too.

Bullion bars come in many sizes. Bought from private suppliers for private possession you will usually pay dealing costs similar to those for bullion coins.

Gold bullion bars can weigh anything from a few grams upwards. 1kg and 100 oz (~3kg) bars are sometimes accepted by participants in professional bullion markets in Zurich and New York - though under strict controls to ensure bullion integrity. There is usually a premium on those locations, because London is the world's main physical bullion marketplace.

In London the market deals in the London Good Delivery gold bullion bar. These gold bars are what most people think of as bullion.

Bullion

This London Good Delivery bar of bullion weighs 400 troy ounces - about 12.4 kilograms - and is about eleven inches long. It is stamped on the top (the bigger face) with the manufacturer's name, the weight, and the assayed purity.

This bullion is commodity gold, and is handled as such in the vaults where the bars are stored. They don't have the idealized super-smooth finish you sometimes see in photographs of mock bullion. The bullion is so soft that the bars are frequently scratched on their faces, and flattened on their edges and corners. Also you can see the finish is slightly dented where the bars have been stacked up on top of one another.

Neverthless, the London Good Delivery bar is the most important bullion product in the world. Loco London (meaning the physical bullion bars will be passed from seller to buyer in London) is the de-facto standard for bullion spot trading all around the world.

All bullion delivered against a London spot market trade (i) must be at least 99.5% pure, (ii) must come in bars of a standard shape weighing about 400 oz (iii) must have been accurately assayed so that he exact gold content of the bar is known (weight and purity are stamped on the bar) (iv) must have been manufactured by one of a listed group of refiners, and (iv) in almost all cases are only accepted from one of a very small number of accredited bullion vaults/couriers.

London Good Delivery bullion is the cheapest form of gold to deal and own, and it fetches the best prices when it is sold. But bullion in this form is not very accessible to private buyers. The reasons are (i) that the bars - being so big - are expensive, and (ii) that the bullion vaults where they must be kept do not deal with the public.

But fortunately if you do want to own bullion as an investment, whether in London, New York or Zurich, you can now access professional market London good delivery bullion through BullionVault.

If you are keen on buying some bullion gold you might like to continue your research by examining advantages and disadvantages of several different ways of buying gold.

Oil prices re-enter the 'danger zone' 2012-2013:... John Kemp

2012-09-04T05:26:00.001-07:00

Oil prices re-enter the 'danger zone' 2012-2013:... John Kemp

This analysis is fairly crude and little more than a restatement of the familiar view that growth slows when the cost of oil in consuming countries (the 'oil burden') climbs much above 4 percent of GDP.

It uses Brent rather than U.S. crude prices (also known as WTI) because seaborne, internationally traded Brent drives the cost of gasoline in the United States and around the world.

Rising oil prices boost input costs and squeeze incomes for firms and households, as well as heightening uncertainty and deterring spending on big ticket items.

The impact is rarely immediate. It takes time for the full impact of rising prices to be realised by consumers and businesses - several tank refills and months worth of operating costs before they appreciate the full hit.

While the analysis is simple, it helps pinpoint the threshold at which high prices start to have an adverse impact on economic growth.

Some analysts prefer to express oil's impact in terms of the rate of change rather than an outright price level. University of California Professor James Hamilton has famously analysed slowdowns caused when oil prices surge above the previous peak set over the last one to three years.

On almost any timescale, current prices do not qualify as a Hamiltonian oil shock because Brent still remains below the record closing high set in July 2008 ($146) as well as more recent peaks in April 2011 ($127) and March 2012 ($126)

Leading oil analysts usually downplay the tension between high oil prices and GDP growth. Oil prices are framed as an investable 'asset class' and a source of increased earnings for oil exploration and production companies rather than an input cost for other businesses and burden on consumers. More often high prices are framed as a consequence of strong demand and a healthy economy.

The framework is intended to convey the idea that it is possible to have high oil prices and strong growth. In practice, that looks difficult. In the past, the International Energy Agency (IEA) and others have identified $100 as the threshold above which prices enter the 'danger zone,' which looks about right.

It is important not to be too doctrinaire about the threshold concept. The U.S. and other economies do not suddenly come to a juddering halt when prices rise from $99 to $101. But the further prices rise above $100 and the longer they remain there, the bigger the hit to the economy, all other things being equal.

One of the unfortunate side effects of quantitative easing (QE) is that investors tend to respond by bidding up oil prices - undercutting some of the stimulus intended by policymakers. In the United States, both the first round of QE in 2010/11 and the second round launched in 2011 were associated with temporary oil price increases.

Even so, there is compelling evidence that prices above $100 have been associated with a loss of economic momentum. It suggests the Hamiltonian focus on rates of change should be supplemented with an emphasis on absolute price levels.

At least in the current environment, it seems the major industrial economies struggle when prices rise much above $100. It is no accident that Saudi Arabia identified $100 as its target price earlier this year.

Coal Price Outlook Seen For 2013-2014

2012-09-04T05:10:00.001-07:00

Coal Price Outlook Seen For 2013-2014

outlook for premium low-vol coking coal is to be expected with price projections revised downward by 10% to $213/mt FOB Australia for 2013 and 5% to $205/mt FOB for 2014 due to supply growing faster than demand, a Commonwealth Bank research report released Wednesday said.

Previous forecasts for the next two years had been at $237/mt FOB and $216/mt FOB.
This compares with current spot prices of $222.50/mt FOB, according to Platts data.

Demand will fall in the next two years, with global steel mills growing at a "more moderate pace than we had expected," the report said.

The exceptions were China and India which would continue to support global coking coal demand due to limited domestic availability, the report said.

China's steel industry, in particular, was "more resilient than rest of the world" with output at the end of 2012 expected to be "some 2-4% higher than in 2011," based on forecasts by Commonwealth Bank.

The global market for liquefied natural gas (LNG) is expected to be balanced in 2012 and 213, with supply and demand seen around 326 billion cubic metres (bcm) and 350 bcm respectively, BarCap said in its Global Energy Outlook.

In global coal trading, BarCap said that 2012's import demands of 837 million tonnes would be met by available exports of 843 million tonnes, while 2013 would see import needs of 849 million tonnes met by 850 million tonnes ready for export.

'European natural gas demand continues to suffer from the weak economy and a poor competitive position against coal, with LNG cargoes being diverted to the higher priced Asian natural gas markets,' BarCap said.

'Coal pricing remains subdued, with weaker demand growth from Chinese steel and power producers, coupled with healthy supply increments from traditional exporters and the U.S., leaving the seaborne market well supplied.'

The healthy coal exports mean that BarCap expects prices to drop, with API2 (European) prices to average $94 per tonne in 2012, and $92 a tonne in 2013.

The bank's lower price expectations were based on coking coal supply, which was "growing faster than demand," the report said. In particular, this medium- term supply growth "should be dominated by Australia, Mongolia, Mozambique and China's Shanxi province."

Lachlan Shaw, the author of the report, told Platts Thursday that his forecast for the price in the fourth quarter was that it might be around $215-220/mt FOB Australia. Much hinged on the BMA strike situation, Shaw said, "the big watch point for coking coal is supply."

South African API4 prices were expected to fall from an average of $95 to $94 a tonne between 2012 and 2013, while Australian Newcastle coal prices would see a an annual average decline from $99 a tonne to $97 per tonne.

Despite healthy coal demand in Europe and Asia, BarCap said that 'the story of the market has been supply, with most exporters able to increase production and U.S. volumes becoming more available

Coals Prices Markets World 2013

2012-09-04T03:56:00.004-07:00

Coals Prices Markets World 2013

The World Coal Association does not provide information on coal pricing. We are unable to supply pricing information, market forecasts or advice on where to buy and sell coal because of our ‘Competition and Compliance’ guidelines. Please direct enquiries on these areas to the companies and organisations listed at the bottom of this page. WCA will not respond to any enquires on these areas.

Coal prices have historically been lower and more stable than oil and gas prices. Coal is likely to remain the most affordable fuel for power generation in many developing and industrialised countries for decades.

In countries with energy intensive industries, the impact of fuel and electricity price increases is compounded. High prices can lead to a loss of competitive advantage and in prolonged cases, loss of the industry altogether.

Countries with access to indigenous energy supplies, or to affordable fuels from a well-supplied world market, can avoid many of these negative impacts, enabling further economic development and growth.

"Coal News and Markets Report" summarizes spot coal prices by coal commodity regions (i.e., Central Appalachia (CAP), Northern Appalachia (NAP), Illinois Basin (ILB), Powder River Basin (PRB), and Uinta Basin (UIB)) in the United States.

The report includes data on average weekly coal commodity spot prices, total monthly coal production, eastern monthly coal production, and average cost of metallurgical coal at coke plants and export docks. The historical data for coal commodity spot market prices are proprietary and not available for public release.

Markets

Documents

American Coal Council - fact sheet
The Coal Resource
The Global Coal Market

Week Ended	Central Appalachia 12,500 Btu, 1.2 SO2	Northern Appalachia 13,000 Btu, <3.0 SO2	Illinois Basin 11,800 Btu, 5.0 SO2	Powder River Basin 8,800 Btu, 0.8 SO2	Uinta Basin 11,700 Btu, 0.8 SO2
Average weekly coal commodity spot prices (dollars per short ton)
27-July-12	$61.50	$65.10	$47.75	$8.50	$35.60
03-August-12	$61.50	$65.10	$46.00	$8.50	$35.60
10-August-12	$59.90	$65.10	$47.75	$8.50	$35.60
17-August-12	$63.10	$65.10	$47.75	$8.50	$35.60
24-August-12	$63.10	$65.10	$47.75	$9.40	$35.60
Source: With permission, SNL Energy Note: Coal prices shown are for a relatively high-Btu coal selected in each region, for delivery in the "prompt quarter." The prompt quarter is the quarter following the current quarter. For example, from January through March, the 2nd quarter is the prompt quarter. Starting on April 1, July through September define the prompt quarter. The historical data file of spot prices is proprietary and cannot be released by EIA; see SNL Energy.

California earthquake will impact silver and gold prices down in American markets

2012-09-03T00:05:00.004-07:00

California earthquake will impact silver and gold prices down in American markets

Imperial County declared a local emergency on Wednesday as officials tallied damage from the swarm of earthquakes that continued Thursday.

There were more quakes overnight, but they were significantly smaller than the ones felt on Sunday when the swarm began.

The Imperial County Board of Supervisors declared the emergency after getting more information about damage. According to the Imperial Valley Press, 19 mobile homes have been red-tagged, several buildings -- including a school auditorium -- have been closed because of damage and water pipes broke. There has been no total damage estimate.

Scientists say the reason is not fully understood, but there is a clue: Earthquake faults work much differently south of the Salton Sea than they do closer to Los Angeles.

Take, for instance, the San Andreas fault as it runs through Los Angeles County. It’s a fault where, generally speaking, two plates of the Earth’s crust are grinding past each other. The Pacific plate is moving to the northwest, while the North American plate is pushing to the southeast.

South of the Salton Sea, the fault dynamic changes. The Pacific and North American plates start to pull away from each other, Cochran told The Times from her Pasadena office. (That movement is what created the Gulf of California, which separates Baja California from the rest of Mexico.)

So Imperial County is caught between these two types of faults in what is called the Brawley Seismic Zone, which can lead to an earthquake swarm, Cochran said.

The last major swarm was in 2005, Cochran said, when the largest magnitude was a 5.1. The largest swarm before last weekend's occurred in 1981, when the biggest quake topped out at 5.8. Before that, there were swarms in the 1960s and 1970s.

Crews will have a better idea of the total damage caused by the quakes in the coming days, said Maria Peinado, a spokeswoman for the Imperial County Public Health Department, but so far the list of affected structures includes about 20 mobile homes shifted from their foundations. The earthquakes also caused "cosmetic" damage to at least three buildings dating to the 1930s in downtown Brawley, said Capt. Jesse Zendejas of the Brawley Fire Department.

A few displaced residents spent Sunday night at an American Red Cross shelter at the Imperial Valley College gymnasium, Peinado said.

silver and golds prices predict down after earthquake

The total damage caused by the quakes in the coming days will impact to gold and silvers prices go down ,because the markets action will trouble, and trends selling the gold on market will up on trading its just prediction but not false reallity thanks

Silver World Prices Markets Prediction 2013-2015

2012-09-02T23:11:00.001-07:00

Silver World Prices Markets Prediction 2013-2015

With Comex increasing margin requirements for a second time so quickly, King World News interviewed James Turk today out of Spain. Turk commented, “This may explain why Comex is raising margins a second time so quickly, they aim to put more pressure on the buyers. Obviously the Comex is trying to put more pressure on market participants by forcing them to liquidate their longs.”

says James Tur

“Eric, here we are at $25.50 which is the price that was identified by your London source last week. So they painted the tape, but the Comex open interest shows that they haven’t driven out any buyers which is very surprising. Normally you would expect to see some longs liquidating on any pullback like the one that we have seen over the past few days, but that hasn’t happened this time around.

The buying pressure in the physical market remains, we are starting to see the industrial buyers coming back in to secure supply. My guess Eric is that the industrial users will be there on any price dip like we have had at present. Up to this point we haven’t seen the boomerang effect that I have been anticipating but I am still expecting a sharp snap back in prices.

As we pointed out in the piece which had Mark Lundeen’s illustration in it, gold is dramatically undervalued and this can only result in much, much higher prices over time. I would just add that I expect the gold/silver ratio to decline over time to under 20 to 1, so silver will be exploding along with the price of gold.

As you know Eric I have been projecting gold to hit $8,000 by 2013 to 2015, so that would equate to silver hitting $400, and that is well within the realm of possibility as silver reverts back to its historical mean.”

This is what happens in bull markets, prices climb to levels that previously seemed unimaginable.

COMMENTS

Turk and others call out a silver price because of the historic ratio gold and silver has had at 16 to 1. BIG PROBLEM- when the ratio was 16 to 1 there was never the largest illegal futers short mess there is now.Silver has the largest naked short position of ANY commodity in the history of the world.

Silver was not needed to manufacture thousands of products needed to make our 2010 lifestyle like it is today with medical, photography, and electronics.

Silver was not consumed to the point that all large stockpiles were consumed because a 30 year manipulation made silver unprofitable to mine. Silver will over shoot its historical ratio with gold UNTIL more silver comes to market and this will take years. Gold and silver will hit a 1 to 1 ratio.

Industrial users are going to panic buy, investors are going to panic buy.. 99% of the worlds population has no idea about what is going on in the silver market.

When the manipulation is broken and should be soon, silver will skrocket. Its like holding a beachball below the surface of the ocean to 1000 feet.

what happens when you release that beachball? the reaction to the manipulation and physical shortage caused by that manipulation will over react.

You will see a 1 to 1 ratio between gold and silver.
I don't think it will take 2 years to get there.

Iron ore Would Rise by more than 50 million tonnes in China 2012 - 2013

2012-09-02T08:24:00.001-07:00

Iron ore Would Rise by more than 50 million tonnes in China 2012 - 2013

Demand for iron ore, a key steelmaking ingredient, has slumped as a sluggish global economy has forced steel mills around the world to cut production. In China, the world's top steelmaker, many plants have halted fresh purchases on poor demand for the metal, falling steel prices and swelling inventories.

A further drop in demand, along with new mine supplies, could push the current three-year low iron ore prices lower still in coming months, threatening profits at mining giants Rio Tinto and Vale.

"Along with slowing industrialisation, urbanisation and infrastructure investment, China's steel demand growth has been falling," Mr Zhang said.

"Average annual growth for China's steel demand between 2011 and 2015 was seen at 4.2 per cent, but whether we can reach that growth is now a question," Mr Zhang added.

China's January-July crude steel production grew just 2.1 per cent to 419.5 million tonnes from year earlier, compared with 10.3 per cent growth in the same period last year.

Mr Zhang said China's steel output would reach a maximum of 700 million tonnes over the next 15 years before starting to fall.

China steel futures hit a record low of 3327 yuan ($515) per tonne on Wednesday, dogged by weakening demand that has pushed down the price of raw material iron ore to levels last seen in 2009.

The sustained drop in Chinese steel prices, which has been on a downtrend since April, has curbed the country's appetite for iron ore, with the price of benchmark 62-per cent grade at $US90.30 per tonne on Wednesday, according to data provider Steel Index.

Global demand for iron ore will not grow and could even drop in the second half of 2012 compared with the first six months, with supply also rising, a senior official at China's Baoshan Iron and Steel has said.

Global seaborne supply of iron ore would rise by more than 50 million tonnes in the second half from the first half, Zhang Dianbo, head of purchasing at Baosteel, China's biggest listed steelmaker, told an industry conference. ... READ MORE RESOURCES

Planned Business Capital Spending for 2012 - 2013 Rose to a Records

2012-09-02T08:13:00.001-07:00

Planned Business Capital Spending for 2012 - 2013 Rose to a Records

Sharp price falls in key commodities including iron ore and coal, combined with well-publicised delays to some proposed mining projects from miners including BHP Billiton, have led to talk the resource boom was dead and buried.

Most industry participants have poured cold water on such predictions, arguing the rapid and prolonged urbanisation of China in particular will continue to drive strong demand for industrial minerals.

Drilling contractor Boart Longyear bore the brunt of investor concerns - its shares dived by more than a third today after it slashed its full-year profit forecast, blaming an expected slowdown in global mining activity.

"Uncertainties ... are driving our mining customers to be more cautious with their capital," Boart Longyear chief executive Craig Kipp said.

Data released by the government on Thursday appeared to support those views.

Led by the resources sector, planned business capital spending for 2012-13 rose to a record $181.5 billion equal to no less than 13 per cent of Australia's $1.4 trillion annual gross domestic product (GDP). Capex growth of 3.4 per cent in the second quarter topped forecasts.

"The mining boom is not over," said Stephen Walters, chief economist at JPMorgan. "We've had some commodity price weakness so the price side of the boom is weakening but the investment side still looks very solid."

Still, the upward revision to the investment pipeline was less than earlier revisions, pointing to a slowing in the red-hot pace of spending that prompted some caution from economists for the longer-term outlook.

"At the start of mining booms you get surprised by how strong capex plans are and in the end, you get surprised by how quickly they go down," said Matthew Johnson, interest rate strategist at UBS. "The risk is they keep dropping but it's too early to tell."

Read more: http://www.smh.com.au/business/the-economy/mining-investment-boom-rolls-

Oil rises above $114 falls towards $112 on storm threat, stimulus hopes

2012-08-27T08:47:00.001-07:00

Oil rises above $114 falls towards $112 on storm threat, stimulus hopes

he euro zone's blue chip Euro STOXX 50 index was down about 0.1 percent after the Ifo data at 2,431.10 points, although volumes were thin as the British market, Europe's largest, was shut for a public holiday.
The main German stock index was little changed, recovering some of its earlier losses, as some of the Ifo institute's findings were not as bad as many feared.

The euro also rose to $1.2530 after the Ifo survey was released, up 0.15 percent on the day, but was holding below a peak of $1.2590 set last Thursday.

Analysts said the weaker outlook in Europe's biggest economy could also support political efforts to find a solution to the region's fiscal crisis, in part by supporting arguments made by German Chancellor Angela Merkel and European Central Bank President Mario Draghi.
"The declining growth rate in Germany shows that the country is not immune from the general slowdown in Europe and outside Europe," said BNP Paribas economist Dominique Barbet.
"This could help Merkel and Draghi convince German people that more efforts to support the euro zone are necessary and are in the interest of Germany."

Crude oil futures reversed earlier gains to fall towards $112 a barrel on concerns that a tropical storm would shut U.S. refineries and as western governments mulled the release of strategic reserves to calm oil prices.
Tropical Storm Isaac swirled into the Gulf of Mexico on Monday and began approaching the Louisiana refining hub, prompting U.S. energy companies to start shutting refineries and raising prospects for a jump in crude oil stocks.
Brent crude futures were down by $1.59 at $112 a barrel by 1359 GMT after earlier falling more than $2.
U.S. crude was down by $1.35 at $94.80.

"With refineries shutting down along the U.S. Gulf Coast, traders are weighing this up and seeing there may be a glut of crude oil in the market," Carl Larry, analyst at OilOutlooks in New York said.
"Isaac is also adding to talk of a possible release from the Strategic Petroleum Reserve, so traders are cautious at these levels after a 2-month long rally," he added.

Marathon Petroleum Corp said on Monday it was initiating the shutdown of its 490,000 barrels-per-day (bpd) refinery in Garyville, Louisiana.

In another indication that regional crude stocks could rise, a fire burned for a third day at Venezuela's biggest refinery on Monday, raising doubts about a speedy restart to operations.
Oil prices have risen nearly 30 percent since June with international sanctions hitting Iranian exports and maintenance affecting North Sea oil flows.

Reuters reported that the White House was "dusting off" old plans for a possible release on fears that rising oil prices could undermine the effect of sanctions on Iran.

Brent crude futures were up $1.04 at $114.63 a barrel by 1022 GMT. U.S. crude was up $1.0 at $97.20.
Tropical Storm Isaac swirled into the Gulf of Mexico on Monday and meteorologists at Weather Insight, an arm of Thomson Reuters, predict the storm will spur short-term shutdowns of 85 percent of the U.S. offshore oil production capacity.

"The storm is probably helping but there's better sentiment generally. Everybody is waiting to see if Jackson Hole will be a turning point for commodities," said Eugen Weinberg, global head of commodities research at Commerzbank.

Central bankers and economists are due to meet in Jackson Hole, Wyoming later this week where Fed Chairman Ben Bernanke will deliver a speech that will be scoured for clues on a third round of quantitative easing.

He told a Congressional oversight panel in a letter that the Federal Reserve has room to deliver additional monetary stimulus to boost the U.S. economy.
The markets will also look for policy signals from the euro zone ahead of a September 6 meeting of the European Central Bank. RESOURCES

Oil Prices Could Sky-rocket Despite Low Demand 2012-2013

2012-08-27T08:12:00.001-07:00

Oil Prices Could Sky-rocket Despite Low Demand 2012-2013

Crude oil rallied alongside other commodities and the euro to its highest in three months last week on NYMEX, mostly from market’s expectation of new Euro Zone bailouts and a third round of quantitative easing from the U.S. Fed.

Crude oil had continued the uptreand after the Energy Dept. reported a decrease of U.S. oil inventory by 5.4 million barrels in the week of last Friday. Scanning the news, you are likely to see quotes such as “The [EIA inventory] report is relatively supportive,” and “Supply concerns persist due to Iran dispute, Syria tension.”

On the crude oil side, although crude stockpile has gone through four consecutive weeks of draw, it is still above the 5-year range (See Chart Below). Moreover, as we are heading into the slow demand season of the year, inventory most likely will start to build again.

Source: U.S. EIA, August 22, 2012

About That ”Tight” Gasoline Market

Inventories of gasoline (and diesel) in the U.S. are at their lowest levels for this time of year since 2008 (partly due to recent refinery fires and the closing of some refineries in the Northeast). Gasoline futures have soared 19% over the past two months as traders seem to be betting that prices of gasoline and diesel will continue to rise. Pump prices typically lag behind the futures market by several weeks.

However, America’s demand for fuel dropped to the lowest July level since 1995, plus the summer driving season is nearing an end, which will lead to even lower gasoline demand.

Furthermore, domestic refiners have significantly ramped up fuel exports. For the first seven months of the year, exports were 14% higher than during the same period in 2011, according to API (American Petroleum Institution) data. What that means is that there are more product supply could be diverted for domestic use. And even if there’s a real shortage for whatever reason, refiners can draw more oil from the abundant stockpile.

Iran Oil Sanctions: Where There’s a Will, There’s a Way

Regarding the “supply concern” due to Iran oil sanction by the western nations, Saudi has cranked up oil production to multi-decades high ahead of the actual sanction that took effect on July 1. Reuters also got the latest scoop that Iran oil are still finding plenty of buyers:

Top Asian buyers — China, India, Japan and South Korea together take more than half of Iran’s crude oil exports — have worked around the European Union embargo, suggesting imports will stay at least around these levels for the rest of the year.

And here’s how these energy hungry Asian economies get around the ban by the U.S. and EU:

South Korea joined its Chinese counterparts by asking Iran to deliver crude on Iranian tankers, government and industry sources said. This shifts to Tehran the responsibility for insurance, sidestepping the EU ban.
Indian refiners have adopted a twin plan to deal with the insurance issue. They are seeking government approval to ask Tehran to deliver the oil, and are trying to use limited cover from state-run insurers for locally-owned tankers to ship it.
Very Few Compelling Price Drivers
Growth in emerging economies in Asia, particularly China, has been the main driver of oil-demand growth in recent years. However, currently, there’s no such compelling story of strong demand and supply shortage that drove oil price to 2008 highs.
Near Term Market Movers

Although the supply and demand factors do not seem to support the current price levels in crude and gasoline, there are plenty of other events to sustain and add the risk/fear/speculation premium.

The worse-than-forecast tropical storm Isaac is expected to strengthen to a Category 2 hurricane and hit the Gulf Coast at midweek disrupting refineries and offshore oil production. Crude and gasoline futures already partly reflected this risk premium. US gasoline prices could really spike is any of the refineries are off line.

Petroleum Economist cited unnamed sources on Friday that IEA has agreed to a coordinated SPR (Strategic Petroleum Reserves) release with the U.S. in September. However, during the IEA coordinated SPR release last summer (due to Libyan civil war), oil price managed to climb back to where it was before the release in just eight days.

Federal Reserves Chairman Bernanke’s often times market-moving speech at Jackson Hole meeting on Aug. 31.

New bailout and stimulus package development from the Euro Zone and/or China.

Geopolitics in the Middle East

EIA estimated that for every $1 per barrel change in oil prices, consumers are expected eventually to see a 2.4-cent-per-gallon change in retail gasoline and diesel prices, if everything else remains the same. Unfortunately, these events mentioned above, with the exception the SPR release (the price effect will be temporary), could be enough to keep crude and gasoline at or above current price levels in the near term.

Gas Price Remaining High When Oil Price Is Going Down

2012-08-27T07:33:00.001-07:00

Gas Price Remaining High When Oil Price Is Going Down

Crude Oil and Commodity Prices
August, Monday 27 2012 - 10:04:26

WTI Crude Oil
$94.70	▼1.45	1.51%
10:14 AM EDT - 2012.08.27

Brent Crude Oil
$111.85	▼1.74	1.53%
10:04 AM EDT - 2012.08.27

Price		Change	Trades	Volume
10:04 - $ 94.70		1.45 1.51%	67,132	103,798
Range	Open	52 Wk Range	1 Year Forecast
94.41 - 97.72	96.67	75.92 - 109.95	$109 / Barrel

Euro Crisis

Furthermore, another major reason is the safe haven buying of dollars because of concern over eurozone instability. There is naturally no sign that things will improve in the eurozone. In fact it seems as if things may only get worse, which in turn will serve to drive oil prices down even more. Greece is going to the polls in a few days, and with many Greeks believing that the decision to join the euro is the reason for the downfall of the Greek economy, one thing is sure, a large number will vote for one of the extremist parties. Even though we will not know the next chapter in Greece's tragic destiny until we know the results of the elections, conversely, if the Greek election results are interpreted as bad news by the markets, eurozone instability will increase. What's more, an exit of Greece from the Eurozone will have a disastrous effect on the markets and the resulting recession would expect oil prices to dive further.

US strategic petroleum

Logic would seem to dictate that if oil prices are going down, the price of gasoline should follow suit and go down also.
However the opposite has been observed lately. Of course as is the case in any fluctuation of oil prices, there is a range of reasons responsible for this.
So why exactly is the price of oil dropping whilst the price of gasoline at the pump is remaining high

The US also has the largest emergency oil supplies in the world. The release of oil from strategic petroleum reserves pushes prices down as the supply of oil is increased. In fact, even a statement to the effect that the government is considering the release of emergency oil supplies is enough to knock oil prices down. One only has to look at what happened in March 2012 when President Obama released a joint statement with the British Prime Minister David Cameron, announcing that both the UK and US were considering the release of emergency oil supplies. This alone was enough to have an immediate effect on oil prices and knock them down.

Gas Prices Affect Consumers

Although consumers are hoping that if the price of oil does continue to fall, the price at the pump will eventually go down, in reality the pricing of gasoline can fluctuate independently from that of crude oil. For once it is likely that retailers will continue to make the most of any dip in the oil market to protect profit margins until a recovery takes place.

Inflation and a weak dollar are also a major component in the domestic cost of production and distribution of gasoline. While crude oil prices depend extensively on geopolitical factors, the price of gasoline is more subject to domestic factors such as inflation.

Spain, which is the Eurozone's fourth largest economy has just had its rating downgraded by Fitch. On the 10th of June an emergency bail-out package of 100 billion euros was approved by a number of finance ministers from the European Union. Although precise details of the package have yet to be bashed out, the money will be used to finance the recapitalisation of Spanish banks. Spain is now the fourth country to be the recipient of a rescue package and this only serves to fuel concern over eurozone insecurity which has a knock down effect on oil prices.

Blame Iran, Really

Naturally world geopolitics also have an effect on the price of oil as well as price at the pump. As of July 1st, 2012 the European Union will stop buying oil from Iran. Until then the European Union will buy 20% of Iran's oil exports. This embargo is in response to Iran's nuclear weapons policy as it is intended to act as an incentive for Iran to come back to the negotiating table where its nuclear weapons policy is concerned. However many analysts have predicted that this embargo is likely to wreak havoc, as Iran has repeatedly stated its intention to shut down the Strait of Hormuz, should these sanctions are enforced. The Strait of Hormuz, extensively covered by oil-price.net occupies a key strategic position as it is at the entry to the Gulf and 20% of the world's oil passes through it. Many analysts including ourselves have predicted that if Iran does carry out these retaliatory measures the price of oil will begin to rise dramatically.

So what will happen over the next few months? Is the price of oil poised to rise or will it continue falling? The fact that Japan is ready to approve a bill which would give sovereign guarantees for Japan's tankers which load Iranian crude oil is an indicator that prices may continue to fall. If the Japanese bill is passed this will undermine the effectiveness of the sanctions which will come into effect on the 1 July, and thus increase the amount of oil on the market, leading to further declines in oil prices

Scenarios for and the gold price trends 2013

2012-08-23T05:28:00.001-07:00

The overarching driver of the gold price for the year 2013 and beyond will be the development of global financial crisis. The levels of debt piled up by Western governments and often also corporate/private sectors are still not sustainable. There is basically one scenario to get rid of this burden: disciplined deleveraging, i.e. reduction of debts. The alternative, which was pursued over the past years, is to create more debt. This could eventually lead to inflation levels significantly above the inflation rates we saw during the last decade in Western currencies.

Either way, both a deleveraging, which will probably be long and painful (‘the lost decade’), or a reduction of the real debt pressures by means of higher inflation will potentially preserve gold as an attractive insurance asset or store of value for many conservative investors in 2013 and beyond. Geopolitical risks, e.g. in relation to Iran, will support this position of gold as a ‘safe haven’ further.

Gold price forecasts 2013

For March 2012 analysts surveyed by Bloomberg end of 2011 forecasted a level of US dollars 1,950.- per ounce of gold.

The French Bank BNP Paribas estimated in December 2012 gold to average US dollars 1,775 per ounce in 2012 and US dollars 2,150 per ounce in 2013. On the other hand Thomson Reuters GFMS expects the peak of the gold price for end of 2012 or beginning of 2013 and a following decrease in the price of gold from 2013 on. The US-bank Morgan Stanley forecasted a price of US dollars 1,550 for 2013. The CEO of the largest US gold mining company Newmont Mining estimates that the price of gold in 2013 may increase to US dollars 2,550.

In June 2012, Goldman Sachs updated its forecast on the gold price to US$ 1,940.- within the following 12 months, i.e. by mid of 2013. Barclays Capital expects a gold price of US$ 1,790.- in the fourth quarter of 2012, while Morgan Stanley now predicts gold prices to be on a level of US$ 2,000.- during that quarter.

Outlook on Gold 2013 and beyond

The diversity of analyst predictions with regard to the gold price in 2013 and the following years mirrors the uncertainties in the global markets.

An interesting fact about gold is that it often performs well in scenarios of deflation (for instance driven by global debt reductions) but also in scenarios with higher than usual inflation rates (which could potentially occur as public debt level increases further).

Gold therefore tends to perform positively in times of economic uncertainties as well as in acute crises. Unfortunately, the global financial problems are not yet sorted out. Some credible commentators expect several more years of uncertainty and painful deleveraging, which could end only when we are approaching the next decade.

A moderate allocation to gold will therefore in the foreseeable future remain the imperative for many investors and could result in a positive trend of the gold price 2013 and beyond. Portfolio diversification, i.e. the spread of monies to different asset classes and investments, should remain an imperative for safety-orientated investors over the coming years.

Golds prices trends, forecast, and prospects 2013

2012-08-23T05:13:00.000-07:00

Gold 2013 ??? the trend for the gold price in 2013 and beyond?

At the beginning of 2012 the gold price had increased on an annual basis in each year for a decade. What is the forecast for the gold price 2013 and beyond? Will the 10-year upwards trend of the gold price continue in 2013?

A majority of gold investors views gold more as an insurance or store of value than as a means of speculation. These investors therefore regularly take a longer-term view on gold as an investment. What trend of the gold price can we expect in 2013 and for the following years? Gold price forecasts will never be completely accurate, but we collected some information on the key drivers influencing the gold price and analysts’ gold price forecasts for 2013.

Gold, the shining yellow metal has proven to be a safe haven investment option for everyone not only because of it being a hedge against inflation, but also due to gold investments have historically shown a low correlation with investments in other asset classes such as stocks or shares, mutual funds, government and corporate bonds and even commodities and other precious metals.

If we see history gold has provided 16.91 % annualized return over the past 10 years. In last 5 years since 2008 the gold prices have risen nearly 125% (Rs. 12500/- to Rs. 28000/-) making a strong case for having it in your portfolio. The percentage allocation to gold should depend on an investor’s risk and return objectives.

Before talking about future return of gold let us look at historical graph given below which shows gold has given continuous appreciation over the decades.

This is because “As fewer and fewer people have confidence in paper money as store of value, the price of gold will continue to rise.”

You might have following question in your mind:-

Gold price forecast trend chart for 2011, 2012, 2013, 2014, 2015, 2016

The gold price forecast trend chart is as shown in the chart below for the years 2011 to 2016.

Do note that I have used one data point per year. That is the data is the average price for the year. This allows me to carry out gold price trend analysis with easy. You can can use once a month data but you will have at least 120 points on your chart. If you would like to place this chart on your website or blog or forum without any modifications please copy and paste the contents of this file http://www.drpetersnews.com/goldlink.txt in your html code of your website

• Will the upwards trend of the gold price continue in 2013 and beyond?

• What we can expect from gold in 2013 and following years?

In this post we will address gold price prospective 2013 and beyond. In order to forecast this we have collected various data & information from various agencies. This forecast is for giving you overview about future gold price we cannot assure that this will be completely accurate.

Gold price trend 2013 and beyond:-

Trend in terms of supply & demand of Gold:-

Like all other commodity Gold price are also driven by basic rule of supply and demand. Demand of gold is categorized mostly in four sector i.e Reserve bank (central bank), jewelry, industrial & investment.

In most of country reserve bank is adopting approach to buying gold continuously, we hope this trend will be continue in 2013 and beyond.

Over the last decade jewelry demand for gold decreased in relation to demand from other sectors, mainly the investment sector. High gold prices and economic uncertainties will likely keep gold demand from jewelry moderate in 2013.

Besides jewelry, we have seen major boost of adopting gold as investment this may be due to availability of various investment options like Gold ETF, Paper Gold etc. This investment boost is likely to continue.

Industrial demand for gold in 2011 was 10% of total demand and due to higher price demand in this sector likely to get reduced.

In addition to demand side supply side is also important for deciding trend. Gold production by mining reached a new high in 2010 and is expected to increase by about 10% until 2013.

Trend in terms of Global Financial Situation:-

Other governing factor for gold price in 2013 and beyond will be global financial situation. Global financial situation is not so good today, level of debt taken by western countries are not sustainable. They are trying hard to improve financial situation either by taking more debt or by reducing current debts. Eventually this situation is causing significant rise in inflation rates & rise in value of western currencies.

In the long run, the gold price has to go up in relation to paper money, there is no other way. To what price, that depends on the scale of the inflation – and we know that inflation will continue.

Gold price forecasts 2013:-

Forecast by	Forecasted Gold Rate in Ounce	Converted Rate per 10 gm in Rs/-	Year
BNP Paribas	2280 $	38635 Rs/-	2013
Thomson Reuters GFMS	2000 $	33890 Rs/-	2013
Morgan Stanley	2175 $	36856 Rs/-	2013
Newmont Mining	2500 $	42363 Rs/-	2013
Standard Chartered	2000 $	33890 Rs/-	2013
Standard Chartered	2107 $	35703 Rs/-	2014

Some forecast may seem to be speculations but one thing is for sure that from here gold price are intended to appreciate more. This may be due to economic uncertainties, unfortunately the global financial problems are not yet sorted out, you might have heard about bad financial situation about Europe and other western countries. This may cause gold price to rise further.

So, looking at global demand and other economic factors gold price will continue to rock in 2013 & beyond. Invest in gold today for brighter tomorrow.

Gold will set record high in future but when that time will only show us.
We will bring you the latest updates on the same as they happen. Stay tuned to Strategic Growth by following Strategic Growth Official Facebook Page and sign up for our free newsletter.

The US economy was doing well, all indications....Bernanke today

2012-03-15T06:04:00.001-07:00

The US economy was doing well, all indications....Bernanke today
mines,gold,silver,oil,gazz,coal,prices,market,asia,europa,america,africa

all indications show that hiring’s are up, unemployment is slowly falling, and recovery is on track. In Europe both Greece and Portugal, have been handled. Spain and Italy are no longer looking as problematic as they were a few weeks ago.

Investors are no longer in need to a safety net. It was time to venture out to find riskier assets.

Gold is trading at 1637.25 down 56.95 joining most of the commodities trading lower today.

Gold should find a bit of support around the 1625 level, but will most likely break through, especially if there is a strong jobs report on Thursday.

Fed Chairman Bernanke today said again that the pace of the economic recovery has been “frustratingly slow.”

Don’t worry if you missed this trade there will be other chances.

Gold Pivot Points (Time Frame: 1 Day)

Name	S3	S2	S1	Pivot	R1	R2	R3
Classic	1616.60	1625.35	1635.00	1643.75	1653.40	1662.15	1671.80
Fibonacci	1625.35	1632.38	1636.72	1643.75	1650.78	1655.12	1662.15
Camarilla	1639.59	1641.28	1642.96	1643.75	1646.34	1648.02	1649.71
Woodie's	-	1625.58	1635.45	1643.98	1653.85	1662.38	-
DeMark's	-	-	1648.58	1641.34	1630.18	-

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Gas Price Remaining High When Oil Price Is Going Down

Crude Oil and Commodity Prices August, Monday 27 2012 - 10:04:26

Euro Crisis

US strategic petroleum

Gas Prices Affect Consumers

Blame Iran, Really

Scenarios for and the gold price trends 2013

Gold price forecasts 2013

Outlook on Gold 2013 and beyond

Golds prices trends, forecast, and prospects 2013

Gold 2013 ??? the trend for the gold price in 2013 and beyond?

Gold price forecast trend chart for 2011, 2012, 2013, 2014, 2015, 2016

The US economy was doing well, all indications....Bernanke today

Gold Pivot Points (Time Frame: 1 Day)

Crude Oil and Commodity Prices
August, Monday 27 2012 - 10:04:26