Crude oil futures climb to Rs 3,380 per barrel

Crude oil futures rose sharply via Rs. 21 to Rs. 3,380 per barrel these days as speculators created positions due to agency world cues.

on the Multi Commodity alternate, crude oil for supply in present month used to be up with the aid of Rs. 21 or 0.sixty three per cent at Rs. three,380 per barrel with a trade turnover of 1,196 quite a bit.

The oil for supply in far-month may received Rs. 19 or 0.56 per cent to Rs. three,417 per barrel in a turnover of 23 quite a bit.

Analysts mentioned widening of positions by speculators in step with an organization pattern in world markets, supported the upside in crude futures.

meanwhile, US benchmark West Texas Intermediate crude was once up zero.23 per cent at $52.36 and Brent crude rose 0.thirteen per cent to $fifty five.31 a barrel.

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Oil prices fall on bloated U.S. market, but other regions tighten

SINGAPORE (Reuters) - Oil prices fell on Thursday as file U.S. crude inventories underscored that markets remain bloated, although merchants mentioned there have been signs that other areas have been progressively tightening.

Brent crude futures had been at $54.09 per barrel at 0530 GMT, down 27 cents, or zero.5 %, from their final shut.

U.S. West Texas Intermediate (WTI) crude futures have been down 26 cents, or zero.5 percent, at $50.89 a barrel.

merchants stated the declines were as a result of rising U.S. crude production that bolstered inventories to report levels.

U.S. fuel inventories and oil manufacturing levels are key as to whether the us remains the world's biggest oil importer, helping to improve prices, or if hovering output and big stocks lower imports, which might weigh on oil markets.

The U.S. power information Administration (EIA) stated a rise of 1.fifty seven million barrels in crude inventories late on Wednesday, bringing whole U.S. shares to a file of 535.5 million barrels.

"in a single day crude inventory numbers pulled the rug out from below the toes of the oil rally," said Jeffrey Halley, senior analyst at futures brokerage OANDA.

The report crude inventories came as U.S. oil manufacturing rose 52,000 barrels per day (bpd) to 9.2 million bpd, a more than 9 % elevate because mid-2016 to ranges final seen firstly of the market stoop in late 2014 and early 2015.

within the U.S. crude inventories, stocks at Cushing, the supply hub for WTI, rose 1.4 million barrels to a record 69.1 million barrels. Rising shares at Cushing, in Oklahoma, typically are inclined to depress the price of the U.S. benchmark.

Cushing crude tank farms have a total storage capacity of 77 million barrels, said Ole Hansen, head of commodity strategy at Saxo bank.

as a result of the glut, U.S. crude exports have soared to a file 1.1 million bpd, with most cargoes going to Asia, the place traders say there are early indicators of a tightening market because of efforts led with the aid of the organization of the Petroleum Exporting international locations (OPEC) to chop output so as to prop up prices.

"the global picture is extra essential (than simply the U.S.) and stocks are being drawn," stated Oystein Berentsen, managing director at oil buying and selling firm strong Petroleum in Singapore.

in the brief-time period, he stated, a number of oil was being bought out of storage all over the world, including to the upcoming glut.

but Berentsen warned that once a significant quantity of crude had been sold out of inventories, "then you definately get the whole impact (of tighter provides)."

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Oil Prices Headed Higher in 2017

New U.S. drilling received’t be enough to offset declining production from OPEC. price could hit $fifty five to $sixty five this year.

OPEC’s determination to dial back oil manufacturing is pushing crude prices better and breathing new life into the U.S. oil patch.

U.S. crude ended Friday at $53.83 a barrel on the brand new York Mercantile change, up 19% for the reason that contributors of the group of the Petroleum Exporting countries agreed on Nov. 30 to chop their combined output by using 1.2 million barrels a day to make stronger costs, which have roughly doubled up to now year. a favorite of smaller buyers, the u.s.a. Oil Fund trade-traded fund (ticker: USO), is up greater than 14% in that time.

OPEC’s move marked a brand new flip within the price competition between the cartel and U.S. shale producers that for 2 years has stored international crude stockpiles brimming and costs low. U.S. shale drillers have spoke back to rising prices with a flurry of deal-making and drilling geared toward seizing market share as OPEC throttles again. given that OPEC introduced its plan, the collection of rigs drilling within the U.S. has risen 23% to 729. The rig count is up eighty% considering that bottoming in may just.

though the stateside drilling may assist keep costs from rising too fast, many forecasters predict oil prices to continue their ascent. In a recent Wall street Journal survey of 15 funding banks, analysts boosted their price forecasts for the first time in five months, suggesting a typical U.S. crude value of about $fifty five a barrel in 2017. merchants are making a bet heavily on their being right. lengthy positions outnumbered bearish bets closing month by way of the widest margin in the 10 years that the Commodity Futures trading fee has tracked the information.

Bulls consider that rising world demand, giant shortfalls in offshore production, and output savings from OPEC and different exporters, together with Russia, imply the market will quickly face a scarcity of provide.

“We shouldn’t be petrified of the availability that is coming on. These barrels can be wanted down the road to rebalance the market,” says Nick Koutsoftas, portfolio co-supervisor of commodities technique for asset supervisor Cohen & Steers. He expects oil to succeed in $sixty five a barrel through year finish.

Oil companies in the Permian Basin were drilling most aggressively. About 40% of all rigs in the U.S. are drilling in that house of west Texas, and analysts predict the region to stay the business’s center of attention, in line with spending plans via producers and the truth that many companies have made pricey land purchases there that they have to justify by using drilling.

some other vivid spot for U.S.-centered service firms is the backlog of drilled but uncompleted wells. The U.S. energy data Administration estimates there are greater than 5,300 wells, waiting to be hydraulically fractured and introduced on-line through firms like Halliburton (HAL) andKeane team (FRAC), which ultimate month listed shares. Bankers and private equity executives are expecting a slew of initial public choices with the aid of oilfield-provider corporations taking a look to lift capital as they ramp up.

although some concern about a flood of Permian oil swamping supplies, many analysts and traders word the declining production in other shale regions, corresponding to North Dakota and south Texas.

Permian increase “gained’t be enough to offset declines” elsewhere, says Adam Rozencwajg of Goehring & Rozencwajg buddies, an funding firm involved in natural tools. “There’s going to be an enormous provide imbalance for 2017 and 2018, regardless of increased spending and elevated activity.”

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Russia shares lower at close of trade; MICEX down 0.30%

Russia equities were lower at the close on Thursday, as losses in the Manufacturing, Mining and Oil & Gas sectors propelled shares lower.

At the close in Moscow, the MICEX fell 0.30%.

The biggest gainers of the session on the MICEX were Aeroflot (MCX:AFLT), which rose 7.40% or 10.88 points to trade at 157.91 at the close. ALROSA ao (MCX:ALRS) added 5.76% or 5.550 points to end at 101.950 and AK Transneft OAO Pref (MCX:TRNF_p) was up 4.94% or 10400 points to 221000 in late trade.

Biggest losers included MMC Norilsk Nickel (MCX:GMKN), which lost 4.26% or 445.0 points to trade at 9994.0 in late trade. Lukoil (MCX:LKOH) declined 2.78% or 94.5 points to end at 3300.0 and Yandex NV (MCX:YNDX) shed 2.12% or 27.50 points to 1271.50.

Advancing stocks outnumbered falling ones by 107 to 106 and 28 ended unchanged on the Moscow Stock Exchange.

The Russian VIX, which measures the implied volatility of MICEX options, was down 3.85% to 22.730.

In commodities trading, Gold for February delivery was up 0.36% or 4.35 to $1200.95 a troy ounce. Meanwhile, Crude oil for delivery in February rose 1.70% or 0.89 to hit $53.14 a barrel, while the March Brent oil contract rose 1.94% or 1.07 to trade at $56.17 a barrel.

USD/RUB was down 0.70% to 59.3065, while EUR/RUB fell 0.10% to 63.228.

The US Dollar Index was down 0.68% at 101.01.

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For China, climate change is no hoax – it’s a business and political opportunity

In mid-November, while Americans were preoccupied with election returns, China sent some of its clearest signals yet that it will continue to pursue an international leadership role on issues including climate. At an international climate change summit in Marrakech, the Chinese government reasserted its commitment to reduce its greenhouse gas emissions. The government announced that its aggregate emissions will peak by 2030 or earlier, and that its emissions per dollar of economic output will decline sharply.

For 25 years I have taught my economics students that climate change represents the ultimate “free rider problem.” To slow global climate change, we need to reduce aggregate global emissions. Yet each individual nation’s efforts are too small to “solve” the problem, so it has only weak incentives to take costly mitigation actions, and strong incentives to “free ride” on the benefits of emission reductions by other countries.

From this perspective, President-elect Trump’s pledges to “cancel” the Paris Agreement and dismantle President Obama’s carbon mitigation initiatives follow standard economic logic. If the United States backs out of commitments to reduce national emissions, it still benefits from other countries’ efforts.

Why, then, is China is pressing ahead with low-carbon initiatives? My research suggests several motives. Chinese leaders want to improve the quality of life in their nation’s cities by reducing air pollution; win large shares of promising export markets for green technologies; and increase China’s “soft power” in international relations. Taking aggressive action to cut carbon emissions helps China in all three areas.

Reducing coal’s cruel impacts

Much of the staggering rise in China’s carbon dioxide emissions in recent decades came from burning coal to produce electricity for the nation’s industrial sector. While this growth has created millions of jobs and wealth for the nation, coal-fired power plants are major sources of greenhouse gases and conventional air pollutants that affect millions of people.

A large body of research, including joint work by U.S. and Chinese scholars, has demonstrated that air pollution in China causes thousands of premature deaths yearly. Coal also provides winter heating in China’s colder cities. Recent epidemiology research has found that coal use for heating greatly increases fine particulate air pollution, which has raised morbidity and mortality rates.Using data from around the world, economists have found that when countries develop economically they move up an “energy ladder.” As a nation grows richer, it tends to substitute more expensive but cleaner fuels such as natural gas for cheap, high-polluting fuels like coal. A natural experiment that occurred in Turkey as natural gas pipelines were built throughout the nation between 2001 and 2014 showed as people gained access to natural gas, air quality improved and mortality rates declined.

China has more coal than natural gas resources, but as its citizens grow wealthier, their willingness to pay to avoid pollution increases. This trend will encourage substitution toward cleaner fuels. As such, China’s political leaders will likely prioritize policies that substitute natural gas for coal, which should reduce air pollutants and greenhouse gas emissions.

Pursuing green and profitable export markets

China’s economic growth has been fueled by manufacturing for export. Now it faces rising competition from other lower-cost manufacturers that produce cheap goods such as sneakers and clothes. In response, China is seeking new export markets. Electric vehicles, solar panels and wind turbines represent promising markets in a world with ample demand for lower-carbon transportation products and power-generating capacity.Trade economists have posited that there is a home market effect that drives certain large industries to concentrate in countries with large domestic markets. Firms in these industries gain experience in producing low-cost, high-quality products by selling to home markets. After they go through this process of learning by doing, they turn to exporting.

China’s Communist Party (CCP) has offered special incentives, including free land and low interest rate loans, to businesses in the green energy sector. By providing these cost advantages, the CCP hopes to give Chinese manufacturers a first mover advantage. And with the rise of China’s universities, China is now home to a huge number of engineers with the training and expertise to compete with Japan and South Korea in developing new technologies.

Over 21 million new cars were sold in China in 2015. China uses more oil than any other country except for the United States, and is projected to become the world’s top oil consumer by 2034. This outlook gives Chinese leaders a major incentive to develop green transportation.

China’s central government is offering direct subsidies to people who purchase electric cars, and many major cities are offering tax incentives for local automakers to produce and market electric and hybrid vehicles. Such policies have helped Chinese electric car and bus maker BYD become the largest electric vehicle producer in the world.China is also seeking market dominance in clean energy technology. The nation’s ambient air pollution and its greenhouse gas emissions would both decline if China could produce more electricity using clean renewables rather than relying on coal. It has been the largest producer of solar photovoltaic cells in the world since 2007, and overtook Germany as the nation with the largest installed photovoltaic capacity in 2015.

U.S industrial regulators have accused China of engaging in predation and dumping low-cost solar panels that compete with U.S products. But environmentalists should cheer that potential buyers in importing nations now face lower prices – especially global companies like Wal-Mart which are pledging to shrink their carbon footprints. As the price of renewable power equipment declines, the law of demand predicts that more U.S. companies will go green.There is a key synergy between electric vehicles and green power generation. As studies have shown, driving an electric vehicle that runs on electricity generated from coal can produce more greenhouse gas emissions than operating a conventional gasoline vehicle. If Chinese exports of electric vehicles and renewable generating technologies lead to their joint adoption by suburbanites, greenhouse gas emissions from both transportation and power generation will fall.

Investing in soft power

For decades, the world’s media have portrayed China as a bully and trade cheat abroad and a repressive power at home. In cutting carbon emissions, the Communist Party seeks to boost its own political legitimacy in the international arena as well as with the Chinese people.

By committing to pursue ambitious environmental goals, Chinese leaders hope to signal to both domestic constituents and international actors that China is an international leader and cares about its own people. A “leading nation” plays an active role in international relations, helps to keep the peace and promotes global public goods. At a time when the United States appears to be stepping back from its leadership role, the CCP may see a chance to fill the vacuum, and make money in the process.

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Technical Review on Shares of United States Natural Gas (UNG)

When applying indicators for technical analysis, traders and investors might want to examine the ATR or Average True Range. The current 14-day ATR for United States Natural Gas (UNG) is currently sitting at 0.28. The ATR basically measures the volatility of a stock on a day-to-day basis. The average true range is typically based on 14 periods and may be calculated daily, weekly, monthly, or intraday. The ATR is not considered a directional indicator, but it may reflect the strength of a particular move.

Some investors may find the Williams Percent Range or Williams %R as a helpful technical indicator. Presently, United States Natural Gas (UNG)’s Williams Percent Range or 14 day Williams %R is resting at -37.14. Values can range from 0 to -100. A reading between -80 to -100 may be typically viewed as strong oversold territory. A value between 0 to -20 would represent a strong overbought condition. As a momentum indicator, the Williams R% may be used with other technicals to help define a specific trend.

Investors may use multiple technical indicators to help spot trends and buy/sell signals. Presently, United States Natural Gas (UNG) has a 14-day Commodity Channel Index (CCI) of 54.24. The CCI was developed by Donald Lambert. The assumption behind the indicator is that investment instruments move in cycles with highs and lows coming at certain periodic intervals. The original guidelines focused on creating buy/sell signals when the reading moved above +100 or below -100. Traders may also use the reading to identify overbought/oversold conditions.

The Average Directional Index or ADX is a popular technical indicator designed to help measure trend strength. Many traders will use the ADX in combination with other indicators in order to help formulate trading strategies. Presently, the 14-day ADX for United States Natural Gas (UNG) is 37.23. In general, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend. The ADX alone was designed to measure trend strength. When combined with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), it can help decipher the trend direction as well.

Taking a peek at some Moving Averages, the 200-day is at 7.6, the 50-day is 8.39, and the 7-day is sitting at 7.28. The moving average is a popular tool among technical stock analysts. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock.
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Gold down in Asia after China industrial output, retail sales noted

Gold prices fell in Asia on Monday after China data mildly disappointed and investors infrastructure spending plans by president-elect Donald Trump with the Republican part in control of both house of the U.S. Congress.

China said for October rose 8.3%, beating the 8.2% rise seen year-on-year and gained 6.1%, below the expected 6.2% rise seen and increased 10.0%, below the 10.7% increase seen.

Earlier, Japan reported third quarter GDP jumped 0.5% and at a 2.2% pace , handily beating expected gains of 0.2% and 0.9% respectively. Separately, comments from Bank of Japan Governor on inflation were noted.

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.55% to $1,217.55 a troy ounce. Also on the Comex, for December delivery dropped 1.03% to $17.203 a troy ounce, while jumped 2.31% increase to $2.565 pound.

Copper was boosted last week after Trump raised the prospect of increased infrastructure spending, while recent signs of strengthening demand in China have also underpinned prices.

Later this week, investors will be looking to congressional testimony by Fed Chair Janet Yellen on Thursday for fresh indications on whether interest rates will rise next month.

Last week, gold prices fell to five month lows on Friday as risk appetite recovered following Trump’s victory in the U.S. presidential election, sapping investor demand for safe haven assets.

Market sentiment was boosted by optimism that increased fiscal spending and tax cuts under a Trump administration will spur economic growth and inflation.

Gold prices were also pressured lower by the stronger U.S. dollar and ongoing expectations for a Federal Reserve interest rate increase in December.

Expectations for higher U.S. interest rates remained intact amid optimism that a pick-up in growth will allow the Fed to tighten borrowing costs.

Investors currently price an 81.1% chance of a rate hike at the Fed’s December meeting; according to federal funds futures tracked Investing.com’s Fed Rate Monitor Tool.

Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Trading Radar: Checking Technicals for Horizons Betapro Comex Gold Bear Plus (HBD.TO)

Technical traders may be looking at recent indicator levels on shares of Horizons Betapro Comex Gold Bear Plus (HBD.TO). After a recent check, the 50-day Moving Average is 14.32, the 200-day Moving Average is 15.79, and the 7-day is noted at 15.19. Moving averages have the ability to be used as a powerful indicator for technical stock analysis. Following multiple time frames using moving averages can help investors figure out where the stock has been and help determine where it may be possibly going. The simple moving average is a mathematical calculation that takes the average price (mean) for a given amount of time.

Traders may be relying in part on technical stock analysis. Horizons Betapro Comex Gold Bear Plus (HBD.TO) currently has a 14-day Commodity Channel Index (CCI) of -110.16. Despite the name, CCI can be used on other investment tools such as stocks. The CCI was designed to typically stay within the reading of -100 to +100. Traders may use the indicator to determine stock trends or to identify overbought/oversold conditions. A CCI reading above +100 would imply that the stock is overbought and possibly ready for a correction. On the other hand, a reading of -100 would imply that the stock is oversold and possibly set for a rally.

Let’s do some further technical analysis on the stock. At the time of writing, the 14-day ADX for Horizons Betapro Comex Gold Bear Plus (HBD.TO) is 30.22. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. The ADX is typically plotted along with two other directional movement indicator lines, the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). Some analysts believe that the ADX is one of the best trend strength indicators available.

Another technical indicator to examine is the Williams Percent Range or Williams %R. Developed by Larry Williams, this indicator helps spot overbought and oversold market conditions. The Williams %R shows how the current closing price compares to previous highs/lows over a specified period. Horizons Betapro Comex Gold Bear Plus (HBD.TO)’s Williams Percent Range or 14 day Williams %R is sitting at -100. Typically, if the value heads above -20, the stock may be considered to be overbought. On the flip side, if the indicator goes under -80, this may signal that the stock is oversold.

The Relative Strength Index (RSI) is one of multiple popular technical indicators created by J. Welles Wilder. Wilder introduced RSI in his book “New Concepts in Technical Trading Systems” which was published in 1978. RSI measures the magnitude and velocity of directional price movements. The data is represented graphically by fluctuating between a value of 0 and 100. The indicator is computed by using the average losses and gains of a stock over a certain time period. RSI can be used to help spot overbought or oversold conditions. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum. The 14-day RSI is currently sitting at 53.51, the 7-day is at 42.16, and the 3-day is spotted at 20.58.

Comex High Grade Copper Futures (HG) Technical Analysis

Comex High Grade Copper Futures (HG) Technical Analysis 

December Comex High Grade Copper is trading flat shortly before the regular session opening. There has been no follow-through to the upside after yesterday’s huge move. This may be an indication that the move was fueled by short-covering rather than new buying.The U.S. Dollar is trading lower which should underpin the market today. Keeping a lid on prices is the oversupply situation and worries over low demand from China.

Technical Analysis

The main trend is down according to the daily swing chart. The market is far from changing the trend to up, however. It is currently testing the retracement zone that could determine whether momentum is changing to up. A trade through $2.0845 will signal a resumption of the downtrend.The short-term range is $2.2025 to $2.0845. Its retracement zone is $2.1435 to $2.1575. Trader reaction to this zone will determine whether the rally continues on to the $2.2025 main top, or if a new secondary lower top forms.

Forecast

Based on the current price at $2.1375 and the early price action, the direction of the copper market today is likely to be determined by trader reaction to the price cluster at $2.1435 to $2.1440.Look for the short-covering rally to resume on a move over $2.1440. This could generate the upside momentum needed to challenge the Fibonacci level at $2.1575. The rally could expand over this level with the next target another resistance cluster at $2.1740 to $2.1750.A sustained move under $2.1435 will signal the presence of sellers. This could trigger a fast break into a downtrending angle at $2.1290.The daily chart opens up to the downside under $2.1290 with the next major target coming in at $2.1040.Look for a strong upside bias to develop on a sustained move over $2.1440 and a strong downside bias to develop on a move through $2.1290.

Gold Price Rallies on Weak Consumer Confidence

Weak economic data sparked a rally in gold prices today, with the contract for December settlement on the COMEX division of the NY Mercantile Exchange closing up 0.78% at $1273.6. The advance in gold prices was in reaction to a decline in Consumer Confidence in October. The Conference Board’s Consumer Confidence Index fell to 98.6 in October from a downwardly revised 103.5 (from 104.1) in September. The downturn in October followed two consecutive monthly gains in the Index. The decline in the Index signals that consumers’ outlook for the labor market was less optimistic than in September, a factor that could decrease discretionary spending.

As a result of today’s advance, the December contract is testing the upper boundary of the bear flag formation that has developed since gold prices stabilized earlier this month. A continued move higher over the near term would void the bearish pattern, a development that would lessen the probabilities of another swift downdraft of similar extent to that which occurred in the latter part of September and into October.

On such a development, the next resistance to watch is at the 38.2% Fibonacci retracement of the September-October sell-off at $1283.4, followed by the 50% retracement at $1295.5. The 61.8% retracement corresponds to former support at the lows established in late August and mid-September near the $1306-$1309 zone.

Further upside over the near term could prove difficult, however, as today’s advance has left the contract heavily overbought according to price momentum indicators. Should sellers step in, first support is at Monday’s minor corrective bottom at $1260.1, followed by the lower boundary of the flag formation, which comes in near the $1254 level. Key support is a the $1246.9-$1243.2 zone. A drop below this level would leave the target at the $1,200 level, which was tested with the lows established in February and late May of this year.

Volume on today’s advance was light, calling into question the sustainability of the move. However, an increase in open interest reported for today’s rally would be a constructive sign, signaling more upside is possible.

Regarding economic data which could have an impact on gold prices this week, New Home Sales will be released at 10:00am ET on Wednesday and on Thursday, Jobless Claims, Durable Orders and Pending Home Sales are on the calendar. The key report is advanced Q3 GDP, set for release Friday at 8:30am ET. Consensus estimate is a reading of 2.5%. GDP data will be important for overall market sentiment, especially after generally disappointing figures for the first and second quarter GDP data. Whether the data will have an impact on Fed expectations is questionable, but a solid release would give the FOMC some further backing for a December rate increase.

Several Federal Reserve officials spoke on Monday, with the most notable comments from Chicago Fed President Evans. He was broadly optimistic surrounding the economic outlook. Evans is one of the most dovish regional Fed Presidents and the comments were broadly in line with his recent rhetoric. Evans also did not rule out a rate increase in December. Atlanta Fed President Lockhart spoke today and did not address the outlook for the economy or monetary policy. At present, fed fund futures are calling for a 74% probability of an interest rate increase in December, up from 69.5% last week. The dollar currently trading off the highs of the session at 98.69, down 0.06% from Monday’s N.Y. close.

Reference by economiccalendar.com

Binary Tribune’s Commodity Trading Signals

Silver for December delivery:

 Buy just above $19.040, TP1 – $19.148, TP2 – $19.175, TP3 – $19.202, SL – just below $18.959.

Sell just below $19.202, TP1 – $19.094, TP2 – $19.067, TP3 – $19.040, SL – just above $19.283.

If break and close above $19.283, buy with TP at $19.418, SL – just below $19.202.

If break and close below $18.959, sell with TP at $18.824, SL – just above $19.040.

Copper for December delivery:

 Buy just above $2.1777, TP1 – $2.1908, TP2 – $2.1940, TP3 – $2.1973, SL – just below $2.1680.

Sell just below $2.1973, TP1 – $2.1842, TP2 – $2.1810, TP3 – $2.1777, SL – just above $2.2070.

If break and close above $2.2070, buy with TP at $2.2233, SL – just below $2.1973.

If break and close below $2.1680, sell with TP at $2.1517, SL – just above $2.1777.

Soybeans for November delivery:

 Buy just above $942.3, TP1 – $946.4, TP2 – $947.5, TP3 – $948.5, SL – just below $939.2.

Sell just below $948.5, TP1 – $944.4, TP2 – $943.3, TP3 – $942.3, SL – just above $951.6.

If break and close above $951.6, buy with TP at $956.6, SL – just below $948.5.

If break and close below $939.2, sell with TP at $934.2, SL – just above $942.3.

Corn for December delivery:

 Buy just above $328.2, TP1 – $329.5, TP2 – $329.9, TP3 – $330.2, SL – just below $327.1.

Sell just below $330.2, TP1 – $328.9, TP2 – $328.5, TP3 – $328.2, SL – just above $331.3.

If break and close above $331.3, buy with TP at $333.0, SL – just below $330.2.

If break and close below $327.1, sell with TP at $325.4, SL – just above $328.2.

Natural Gas for November delivery: 

Buy just above $2.975, TP1 – $3.011, TP2 – $3.020, TP3 – $3.029, SL – just below $2.948.

Sell just below $3.029, TP1 – $2.993, TP2 – $2.984, TP3 – $2.975, SL – just above $3.056.

If break and close above $3.056, buy with TP at $3.103, SL – just below $3.029.

If break and close below $2.948, sell with TP at $2.901, SL – just above $2.975.

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Railroad stock rebound signals good things for the economy

Stock prices of companies in one of my favorite industries — railroads — were obliterated last year, so it's nice to see them back on the mend.
Shares of Norfolk Southern Corp., Union Pacific Corp. and CSX Corp. finally hit rock bottom early this year, with all of them down about 40 percent from previous highs. But since January, railroad companies have rebounded, which could be a harbinger of better economic times ahead.

That's because railroads, along with other transportation stocks like airlines and trucking, are a barometer of industrial economic activity. While it is true that two-thirds of U.S. economic activity comes from consumer spending, the other third involves industrial production.
Dow Theory Forecasts, a stock market newsletter, predicted: "A sustained pickup in industrial activity could help U.S. gross domestic product finally accelerate north of 2 percent."
Before this rally, the rails were caught in an unrelenting crossfire of negative economic news, and by January 2016 their stocks were priced as if the sector might disappear. Imagine that — a world devoid of that lonesome whistle blowin'.

The culprits were many. First, crude oil prices collapsed in 2014 from above $100 barrel to below $40 a barrel, which caused oil producers to cut back on rail shipments of crude oil and fracking sand. Coal shipments have also declined in recent years as power plants transitioned to cleaner natural gas.
For example, in 2012 about 7.6 million tons of coal were shipped by rail, accounting for 42 percent of total rail tons, according to the Bureau of Transportation Statistics. By 2015, that figure had dropped to 6.3 million tons, or 35 percent of the total.

Secondly, U.S. manufacturing also slowed last year, which had a negative impact on the rail industry. The Institute for Supply Management's Manufacturing Index, a common measure of manufacturing activity, fell throughout 2015 to below 50 by the end of the year. An ISM Index reading below 50 indicates the sector is contracting.
On top of all that, the strength of the U.S. dollar against overseas currencies made U.S. exports of chemicals, grains and steel more expensive and less competitive. This led to a decline in exports and ultimately in rail activity.

But over the last eight months, railroad stocks have been on fire. Norfolk Southern is up 44 percent, Union Pacific has gained 38 percent and CSX is up 35 percent.
These gains are the result of crude oil prices stabilizing and moving above $45 a barrel. The ISM Index also moved higher this year — above 50 — although it dipped slightly below that level in August. And the dollar has weakened a bit, making U.S. exports cheaper, a tailwind for manufacturers and rails.

The number of rail freight carloads remains well below previous years, but an uptick in carloads since April indicates stabilization in the sector. The number has increased from 1.04 million carloads in April to 1.1 million in July, the most recent data available.
"These stocks sold off too much last year," said Eric Marshall, head of research for Hodges Capital Management, a Dallas investment firm. "Freight volumes haven't increased significantly, but the rail stocks have moved up in anticipation of stability."

When a sector rallies as far and as fast as rails have, stock prices may outpace earnings, pushing valuations to excessive levels. But the estimated stock price-to-earnings ratios of Union Pacific remain a modest 16.7 and the p/e ratios for Norfolk Southern and CSX are even lower at about 15.
This is below the p/e of the S&P 500, which currently resides at 18. Marshall said investors who buy rail stocks at these levels should do well over the long term because earnings are expected to improve enough to support even higher prices.

For example, Union Pacific expects earnings per share of $5 this year, but that is expected to improve to $5.67 per share in 2017, a 13 percent improvement. The other railroads are also expecting improved earnings going forward, and investors in these companies can also pocket annual cash dividends above 2 percent.

An interesting sidelight to the railroad industry is that while it accounts for less than 1 percent of the market capitalization of the S&P 500 Index today, in the late 1890s railroads held center stage in the U.S. economy. They were the nation's most valuable companies.
In fact, the precursor to the Dow Jones Industrial Average, developed by Charles Dow in 1896, was comprised solely of the nation's 20 largest railroad companies.

While their prominence has certainly faded, they are, thankfully, not disappearing, and investors curious about where the economy is going should hop aboard.
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Algeria oil minister sends Opec mixed signals

Algeria’s oil minister, who is hosting an informal meeting of Opec ministers in Algiers the week after next, sent conflicting signals after diplomatic efforts over the weekend to try to drum up support for an agreement on concerted oil market action.

Noureddine Boutarfa has been trying to reconcile the desire for action among many Opec and non-Opec countries suffering from reduced oil prices, with the reluctance of the few countries in a position to take that action.


Mr Boutarfa met Mohammad Barkindo, the Opec secretary general, and Saudi Arabia’s oil minister, Khalid Al Falih, on Friday in Paris, and Russia’s oil minister, Alexander Novak, later in Moscow.

Mr Barkindo held talks early last week in Tehran with the oil minister Bijan Zanganeh, who voiced support for efforts to stabilise oil prices but declined to commit Iran to these efforts until it has reached production levels of 4 million barrels per day (bpd), which prevailed before nuclear sanctions were imposed four years ago.


Iran’s production rose by 500,000 bpd soon after sanctions were lifted in January but has stalled at about 3.6 million bpd over the past three months.

Mr Boutarfa said "there is a consensus around the necessity of stabilising the market", but he also backed those countries who insist they have the right to increase output.

"Iran has the right to increase production to the pre-sanctions level," Mr Boutarfa said after meeting Mr Novak on Friday. "It is also the right of Libya and Nigeria to increase," he said.


Libya and Nigeria have seen sharp reductions in their output because of civil war and sabotage by militants, respectively.

Iraq also reserves its right to keep increasing production, as does Venezuela, both of which have suffered from severe underinvestment in their industry.

Meanwhile, the countries in a relatively strong position – Saudi Arabia, the UAE and Kuwait, which are the lowest-cost producers and have maintained investment in their oil sectors – view the market heading towards balance and are resisting a policy shift that would temporarily boost prices and encourage into the market higher-cost supply from their competitors.


Ministers from all three key Arabian Gulf producers have said they would back any efforts to stabilise the market, while shying away from any comments on curbing output.

Likewise, at the weekend Mr Barkindo talked of aiming for "sustainable stability" rather than supply curbs.

A statement last week by Saudi Arabia and Russia about stabilising the market was similarly widely dismissed.

Many market commentators see the latest initiative as having been forced on Saudi, which is trying to avoid making negative comments while the market remains fragile. "The so called ‘important announcement’ was without any substance," said Amrita Sen, an oil market analyst at Energy Aspects, adding that Saudi’s motivation was "its desire to jawbone the market higher while simultaneously, and contradictorily, keeping production at record levels".


Ironically, there have been consistent signs recently that market conditions are improving, particularly on inventories.

Prices have been stable since early April, for the most part sticking to a range between US$40 and $50. On Friday, Brent crude closed at $48.01.

"It’s a very, very interesting dynamic at the moment," Ms Sen said. "After two-and-a-half years of building inventories they are finally beginning to draw."


While that has been slowly happening in the big economies with good data – the US, European Union, etc – there is evidence it is happening more quickly in non-OECD countries, where the oil demand growth has been growing fastest. For example, the oil stored in offshore vessels has been dropping much more quickly than in the more visible land-based storage facilities.

"This is the start of a process rather than the end, so they have to be patient," Ms Sen said.


Many executives, such as the Royal Dutch Shell’s chief executive, Ben van Beurden, have been saying there is a supply crunch on the way because of the drop in investment over the past two years.

That has also resulted in lower investment to keep natural production declines at a minimum.

Consequently, those decline rates have doubled, in many cases, over the past year or so, including in some key Opec players such as Angola.
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Commodities Round-up: Rise in US inventories weighs on oil futures

Oil futures remained in retreat mode for a second successive session on Thursday (1 September) as overnight US inventory data weighed on trading sentiment. At 2:17pm BST, the Brent front month futures contract was 1.11% or 52 cents lower at $46.37 per barrel, while the West Texas Intermediate fell 0.98% or 44 cents to $44.26 per barrel.

Data released overnight by the US Energy Information Administration said crude stocks rose by 2.3m barrels stateside to 525.9m barrels in the week to 26 August.

The rise exceeded market forecasts of an increase in the 700,000 to 825,000 barrel range, prompting an early oil market sell-off in Asian trading. The trading pattern became firmly entrenched when Europe opened for business, with dollar bulls also out in full force.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are due to meet in Algiers on the sidelines of the International Energy Forum (IEF) on 26-28 September to revive global output freeze talks that stalled in April.

However, analysts remain sceptical of anything concrete emerging from the Algiers talks. In a note to clients, Commerzbank analysts said: "There is still lots of correction potential, given the overhang of speculative long positions and exaggerated hopes for an output freeze."

Nonetheless, speaking in Tokyo, Saudi Foreign Minister Adel al-Jubeir said OPEC and non-OPEC oil producers were increasingly moving towards "a common position, toward a common effort."

"If you want to have an impact then all of us have to shoulder the responsibility, and over the past five or six months, I believe that there has been an increasing realisation that this is a collective effort," he concluded.

Away from the oil market, the strength of the dollar dented confidence in major precious metals. At 2:39pm BST, Comex gold for December delivery fell 0.14% or $1.80 to a two-month low of $1,309.60 an ounce.

With a US interest rate hike back on the cards, analysts at Kitco Metals said more bad news was on the horizon for gold investors adding that "the path of least resistance continues to be lower." Kitco's view was echoed by analysts at Natixis who opined that a US rate hike could arrive as early as December.

Elsewhere, Comex silver slipped 0.03% or 2 cents to $18.71 an ounce. Concurrently, spot platinum was lower by 0.84% or $8.88 to $1,043.23 an ounce, completing declines across the precious metals market board.
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Oil Falls to One-Week Low After Surprise U.S. Crude Supply Gain

Oil dropped to a one-week low after a government report showed that U.S. crude inventories unexpectedly rose last week.

Crude supplies rose by 2.5 million barrels in the week ended Aug. 19, according to an Energy Information Administration report. A Bloomberg survey ahead of the data had forecast an 850,000-barrel decline. Stockpiles are at the highest seasonal level since at least 1986. Iran’s oil ministry said the country hasn’t yet decided whether to join informal OPEC talks next month in Algiers following a Reuters report that the nation had confirmed its attendance.
"We’re still in a fundamentally oversupplied market," said Adam Wise, who helps run a $7 billion oil and natural gas bond and private equity portfolio at John Hancock in Boston. "The build was unexpected and comes amid a lot of OPEC chatter, making for a sloppy, if range-bound market."

Crude entered a bull market last Thursday, less than three weeks after it tumbled into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of Petroleum Exporting Countries may lead to action to stabilize the market. Iraqi Oil Minister Jabbar Al-Luaibi has asked international companies to increase output to boost national revenue, according to a statement.

West Texas Intermediate for October delivery dropped $1.33, or 2.8 percent, to close at $46.77 a barrel on the New York Mercantile Exchange. It’s the lowest settlement since Aug. 16. Total volume traded was 3.5 percent above the 100-day average.
Ample Stockpiles

Brent for October settlement fell 91 cents, or 1.8 percent, to $49.05 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $2.28 premium to WTI.

U.S. crude stock piles rose to 523.6 million, leaving supplies at the highest seasonal level in decades, the EIA report showed. Inventories at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, advanced by 375,000.

Crude production in the U.S. fell by 49,000 barrels a day to 8.55 million, while imports surged 449,000 barrels to 8.64 million.

Refineries reduced operating rates by 1 percentage point to 92.5 percent of capacity. Refiners typically boost their operations in July to meet peak gasoline demand before ratcheting back in August. Over the past five years, refiners’ thirst for oil has dropped an average of 1.2 million barrels a day from July to October.
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Palladium futures settle at highest level in over a year

Palladium futures rallied Wednesday to settle at their highest level in more than a year, with strong vehicle sales in China implying strong demand for the metal used in car-making.

A weaker U.S. dollar provided support to the broad dollar-peg precious-metals complex.

Gold and silver futures notched a second straight session of gains as some traders bet on a potential rise in Asian demand for the yellow metal.

September palladium PAU6, -0.69%  jumped up by $32.05, or 4.6%, to settle at $726.40 an ounce on Comex. The settlement was the highest for futures prices since mid-June 2015, according to FactSet. Futures prices for the metal trade more than 30% higher year to date.

Its sister metal, October platinum PLV6, -0.32% added $23.20, or 2%, to $1,183.10 an ounce, with prices based on the most-active contracts scoring for the strongest finish since early March of last year.

Meanwhile, December gold GCZ6, -0.22% rose $5.20, or 0.4%, to finish at $1,351.90 an ounce. Silver for September delivery SIU6, -0.45%  jumped 32 cents, or 1.6%, to $20.17 an ounce.

Metals got a boost “due to short-covering as the bears view the falling dollar, stalling stock market, and tight trade in the palladium market being a trade they want to walk away from,” said Adam Koos, president of Libertas Wealth Management Group. “When shorts cover, it adds buying pressure to a security, driving the price up.”

He said palladium and silver are most likely outpacing gains in gold as traders look for “something new and exciting. Maybe investor psychology has humans convinced that if they buy something not so mainstream, maybe they’ll make more money.”

Weakness in the dollar versus its currency rivals also helped make metals that are traded in the greenback more attractive to overseas buyers. The ICE U.S. Dollar Index DXY, +0.16%  fell 0.5%.

Additionally, China’s car market grew at its fastest pace in six months in June, driven by a tax break, according to Dow Jones. That signals a likely spike in demand for palladium and platinum, which are both used to make car parts.

As for gold and silver, Chintan Karnani, chief market analyst at New Delhi-based Insignia Consultants, said he is bullish on both, and expects to see a rise in physical demand for the metals.

The Indian Hindu festival season will begin on Aug. 18 and the monsoon rainfall has been good all over India, he said.

Given that, “rural demand for gold and silver will be on the higher side of expectation curve,” said Karnani. And “tensions in the South China Sea will ensure higher gold demand from East Asia as well.”

Overall, however, gold prices have been subdued since last week’s stronger-than-expected July jobs report pushed down precious metals prices as expectations for a U.S. interest-rate hike in 2016 increased. So far this month, gold futures are off about 0.2%, but year to date are up 28%.

The near-term challenge for the precious metal is a “stronger dollar and positive risk sentiment on back of upbeat U.S. data,” said UBS strategist Joni Teves, in a note to clients. See Economic Calendar.

She said the likely catalyst for a pickup in trading activity is the looming Federal Reserve retreat in Jackson Hole, Wyo. It takes place Aug. 26 and may offer some clues on the speed and scope of potential interest-rate hikes. Higher rates are presumed to boost the dollar, cutting the appeal of greenback-priced gold to overseas investors. Further, a rising-rate climate tends to sway investors away from nonyielding gold into yield-bearing alternatives.

Still, precious metals prices remain underpinned by global economic uncertainty and bets that the rates could stay lower for longer, some analysts argue. And with global interest rates so low, Teves made her bullish gold position clear.

“We would regard any further weakness up ahead as a potential buying opportunity, given our view that the macro story remains intact,” she said.

Read: The chart that’s proving crash-happy stock bears wrong

Rounding out metals trading Wednesday, high-grade copper for September delivery HGU6, +0.46% rose 2.1 cents, or 1%, to $2.171 a pound.

Among exchange-traded funds, the SPDR Gold Trust GLD, +0.47%  rose 0.5% and the silver ETF iShares Silver Trust SLV, +1.54%  added 1.6%, while the VanEck Vectors Gold Miners ETF GDX, +1.76%  rose 2.1%.
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