To download the full report (PDF document) please click here COLUMN: Commodity funds pick oil as safest option: John Kemp
 --John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Dec 19 (Reuters) - In a tough landscape for commodities, most hedge funds and other money managers have decided to stick with long positions in crude oil, boosting their investments even as prices slide.
For commodity funds, who must basically be long of something to justify their continued existence, crude is the least-dangerous among a series of tricky alternatives. ENERGY: Brent rises above $104 on growing threats to supply
SINGAPORE, Dec 20 (Reuters) - Brent crude futures rose above $104, buoyed by the risk of supply being disrupted from Central Asian oil producer Kazakhstan, even as sanctions-hit Iran struggles to maintain its production and Libyan output is delayed.
"Geopolitical tensions that threaten oil supply have put a floor under prices, and with better economic data out of the United States, there are enough factors to push oil higher, barring any surprises out of the euro zone," said Ben Le Brun, market analyst with OptionsXpress in Sydney.
Thailand diesel exports down in Dec as domestic demand rises
SINGAPORE, Dec 20 (Reuters) - Thailand's diesel exports fell in December as domestic demand increased with year-end holidays and as vehicles returned to the streets after the country's worst floods in 50 years, industry sources said on Tuesday.
Diesel exports to Singapore nearly halved in the first two weeks of December to 84,341 tonnes, from the same period a month ago, data from Singapore's International Enterprise showed.
China's Yancoal in talks to buy Australia's Gloucester-sources
MELBOURNE, Dec 20 (Reuters) - Chinese-controlled Yancoal Australia is in talks to buy Gloucester Coal to create Australia's top independent coal miner, three sources said on Tuesday, as strong Asian demand drives a boom in coal deals.
Gloucester, which has a market value of $1.4 billion, confirmed it was in talks with an unnamed suitor on a potential takeover and requested a two-day trading halt on its shares pending an announcement on a deal.
CNOOC says gas leak found in south China pipeline
Dec 20 (Reuters) - Chinese offshore oil and gas firm CNOOC Ltd halted production at two platforms after discovering a leak in the subsea gas pipeline at the Zhuhai terminal in southern China near Hong Kong, the company said in a press statement.
"Currently the terminal is under accelerated depressurization process," CNOOC said in the statement. "This incident neither caused any injuries nor environmental pollution, and the situation is under control."
Spill reported at Shell Gulf of Mexico drill site
HOUSTON, Dec 19 (Reuters) - The U.S. Coast Guard was investigating a 13,000-gallon spill from an oil rig leased to Shell , operating about 26 miles (41 km) southeast of last year's BP Plc Macondo oil well disaster, a Coast Guard spokesman said on Monday.
The spill of either drilling fluid or oil mixed with drilling fluid was reported Sunday by Transocean Ltd's Deepwater Nautilus rig, which was drilling a well at Shell's Appomattox discovery.
ConocoPhillips OK'd to drill in petroleum reserve
ANCHORAGE, Alaska, Dec 19 (Reuters) - ConocoPhillips on Monday won a key permit that will allow construction of an oil field that is expected to provide the first-ever production from the National Petroleum Reserve-Alaska on the western North Slope.
The U.S. Army Corps of Engineers said it granted a modified wetlands-fill permit that will allow ConocoPhillips to build a road, bridge and above-ground pipeline connecting its CD-5 project with the Alpine oil field on state land just east of the petroleum reserve. AGRICULTURE: US soy near 4-week top on dry South American weather
SINGAPORE, Dec 20 (Reuters) - U.S. soy gained more ground to hover near a 4-week top, while corn was little changed around two-week highs, supported by dry weather in South America, which is threatening to curb supplies.
"If you look at the estimates, many have factored in almost best case record crop scenarios for South America, that's always a danger as you still have the full growing season to go through," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
US says encouraged by Japan beef review
WASHINGTON, Dec 19 (Reuters) - U.S Trade Representative Ron Kirk on Monday welcomed Japan's decision to review its ban on certain cuts of beef from the United States as a sign of Tokyo's interest in joining talks on an Asia Pacific free trade pact.
"I welcome this important step which puts us on a path to address the long-standing issue of beef trade with the United States," Kirk said in a statement after meeting with Japanese Foreign Minister Koichiro Gemba.
Canada Wheat Board names Bruce Johnson as chairman
WINNIPEG, Manitoba, Dec 19 (Reuters) - The Canadian Wheat Board's newly downsized board of directors has chosen a new chairman, the CWB said on Monday.
The new chairman is Bruce Johnson, a former grain industry executive from Regina, Saskatchewan, who replaces farmer Allen Oberg.
Poland's 2011 grain harvest seen down 3.3 pct
WARSAW, Dec 19 (Reuters) - Poland's grain harvest is estimated to have fallen 3.3 percent in 2011 to around 24.3 million tonnes due to unfavourable weather conditions, Poland's statistics office said on Monday.
Intensive rainfall in autumn 2010 delayed sowings, which left plants vulnerable to severe frosts in the winter, the office said. Unusual spells of snow and low temperatures in May also took their toll, while further rains in June hindered harvest.
Cameroon 2011-12 coffee output seen up at 65,000 T
YAOUNDE, Dec 19 (Reuters) - Cameroon coffee production may nearly double in 2011-12 to 65,000 tonnes, recovering from a dismal previous season, a senior official at industry regulator CCIB told Reuters on Monday.
He said coffee plants that had been rested during the 2010-11 season will become productive again and enhanced use of herbicides will reduce disease. BASE METALS: London copper climbs off 2-day low on IMF fund boost
KUALA LUMPUR, Dec 20 (Reuters) - London copper inched up, edging off a two-day low in the previous session, as a euro zone pact to raise IMF resources boosted market confidence, though investors' year-end caution is set to push copper to its first annual decline in three years.
"Europe's impact has more to do with sentiments," said Gavin Wendt, founder and senior resource analyst at MineLife Pty Ltd in Sydney.
Trafigura owns less than 1 pct of Norilsk Nickel -FT
LONDON, Dec 20 (Reuters) - Commodities trade house Trafigura owns less than 1 percent of top global nickel and palladium producer Norilsk Nickel , the Financial Times reported on Tuesday.
Norilsk said last year Trafigura had bought an 8 percent stake in the Russian firm worth around $3 billion at the height of a dispute between Norilsk co-owner Vladimir Potanin and aluminium giant RUSAL over control at Norilsk.
ALL, Triunfo, miner form integrated iron ore firm
SAO PAULO, Dec 19 (Reuters) - Brazilian logistics companies ALL and Triunfo are teaming up with mining company Vetorial to form a joint venture that will create an integrated iron ore company, that includes mining, rail transportation and port access, the companies said on Monday.
The venture to be called Vetria will produce iron ore out of Corumba on Brazil's border with Bolivia, where other miners such as MMX controlled by billionaire Eike Batista operate.
Attorneys in Southern Copper case nab $285 mln fee
WILMINGTON, Del., Dec 19 (Reuters) - The plaintiffs' attorneys in a shareholder lawsuit involving Southern Copper Corp won a blockbuster $285 million fee award from Delaware's Chancery Court on Monday.
It is believed to be the biggest fee award ever by the court, one of the busiest venues in the United States for commercial litigation.
London Metal Exchange to create clearing arm
LONDON, Dec 19 (Reuters) - The London Metal Exchange has decided to create its own clearing service called LMEClear, it announced on Monday, a move traders say is designed to make the exchange more attractive ahead of a potential sale next year.
Trades at the LME, the world's largest industrial metals exchange, are currently cleared through LCH.Clearnet, Europe's largest independent clearing house. PRECIOUS METALS: Gold tests $1,600 but Europe anxiety weighs
SINGAPORE, Dec 20 (Reuters) - Spot gold struggled to breach $1,600 an ounce, as investors remained nervous over the progress of a solution to the euro zone debt crisis, while a firmer dollar may cap gains in bullion.
"The market is very choppy due to thin volume," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
European Goldfields mulls Qatari fallback option
LONDON, Dec 19 (Reuters) - European Goldfields , which has agreed to a C$2.5 billion ($2.4 billion) takeover by Canadian group Eldorado Gold , is hoping to keep an investment deal with Qatar's sovereign wealth fund as a fallback option.
Qatar Holdings agreed in October to provide a $to back the deal when they vote in February.
GLOBAL MARKETS: Stocks, euro steady after sell-off
TOKYO, Dec 20 (Reuters) - Asian stocks and the euro steadied, but sentiment remained fragile on concerns that efforts to contain the euro zone debt crisis were faltering and tougher rules to strengthen banks' capital would further undermine their profits.
"Developments overnight helped ease some risks of immediate disorder ... triggering a rebound across the markets, which were spooked and overshot yesterday," said Makoto Noji, senior strategist at SMBC Nikko Securities. CHART OF THE DAY: SHANGHAI COPPER - 3 MTHS TECHNICAL OUTLOOK BEYOND THE HEADLINES: China halves Jan Iran oil imports in payment dispute
BEIJING, Dec 19 (Reuters) - China's top refiner Sinopec Corp will in January buy less than half the crude it typically imports from Iran, trade sources said on Monday, as the two haggle over terms against a backdrop of rising international pressure on Tehran.
Iran's largest crude buyer has cut its January purchases by about 285,000 barrels per day (bpd), sources said. That is over half of the close to 550,000 bpd that China has been buying on annual contract this year.
Cuba sweetens pot for new private farmers
HAVANA, Dec 19 (Reuters) - Cuba, trying to lure people back to the land and lift food production, has modified a land lease program so that private farmers can rent more land and keep it in their family as if they owned it, farmers said over the weekend.
The measures, adopted at a recent Council of Ministers meeting and not yet announced, are the latest loosening of the doctrinaire communism that has ruled Cuban agriculture policy for decades and were hailed by farmers as a step forward.
Clashes in oil region threaten Kazakh leader
ALMATY, Dec 19 (Reuters) - Riots by oil workers in western Kazakhstan suggest pressure is mounting for President Nursultan Nazarbayev to relax the rigid authoritarian system he has built in the vast Central Asian state, which is fast losing its veneer of stability.
Officials say 14 people were killed in Friday's clashes following the dismissal of oil workers in Zhanaozen in western Kazakhstan and another person was killed when violence spread to a nearby village on Saturday. It was a local crisis that had long been simmering and local authorities had failed to master.
Anglo considering Amapa iron ore stake sale-sources
LONDON, Dec 19 (Reuters) - Global miner Anglo American is considering selling its majority stake in the Amapa iron ore operation in northern Brazil as it focuses on its flagship Minas-Rio growth project further south, several industry sources said on Monday.
Anglo bought control of the Amapa operation in 2008, as part of the $5.5 billion Minas-Rio acquisition deal with Brazilian billionaire Eike Batista's MMX.
Russian steel firms bet industry to thrive post-WTO
MOSCOW, Dec 19 (Reuters) - Russian steelmakers have invested heavily before the country's entry to the WTO on a bet that steel-intensive domestic industries such as carmakers will thrive under heightened competition - a risk that has a good chance of paying off.
In the deal with the World Trade Organization, sealed on Friday after 18 years of tortuous negotiations, Russia retains important privileges, including protective auto sector tariffs.
Thai 2012 rubber output seen up 5 pct -exporters
BANGKOK, Dec 19 (Reuters) - Thailand, the world's biggest rubber producer and exporter, expected production of around 3.15 million tonnes in 2012, about 5 percent more than the 3.0 million forecast for 2011, the head of the country's rubber exporters' association said on Monday.
"It's rained a lot this year and we may face a lot of rain again, so we expect a minimal rise of around 5 percent in production," Pongsak Kerdwongbundit, president of the Thai Rubber Association, told Reuters. | |
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