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EconMatters's Blog

EconMatters - Global Economic and Market Analysis That Matters

Slow Relief at the Pump As Gasoline Decouples From Crude Oil

May 14, 2011 by EconMatters   Comments (0)

By EconMatters The Reuters Jefferies CRB Index is down 8% so far in May with almost every single commodity in the index registering red. Even the ongoing geopolitical tension in the Middle East and North Africa has not been able to shield the ever bullish crude oil from the commodity rout. Both Nymex WTI and ICE Brent suffered heavy losses. In the two weeks ending Friday, May 13, Brent dropped about 10% to close at $113.83 a barrel on ICE, while WTI plunged 12% to $99.65 a barrel at Nymex, and RBOB gasolne futures for June also lost 8% to around $3.0766 a gallon....

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Silver Bubble and Volatility (Guest Post)

May 13, 2011 by EconMatters   Comments (0)

By Charles Rotblut, CFA The recent plunge in silver prices provides lessons for all investors, regardless of whether you invest in commodities or not. As I started writing this on Thursday morning May 12, iShares Silver Trust ETF (SLV) was down by 5.7%. Though significant by itself, the decline was just the latest in what has been a very bad month for SLV shareholders. Since the start of May, the ETF has fallen from $46.88 to this morning’s $32.42, a drop of nearly 31%. The drop is even worse when you consider that SLV hit an intraday high of $48.35 on April 28. Chart courtesy...

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Barclays Capital Survey Says China and Commodities Still Favorable (Guest Post)

May 12, 2011 by EconMatters   Comments (0)

By Commodities Now Barclays Capital held their 4th annual China Commodities Seminar in Suzhou last week of April, 2011. The seminar was attended by around 50 representatives from major producers, consumers and trading houses, primarily in the energy and metals sectors. During the event, BarCap surveyed participants on their outlook for a number of areas. The key findings are below. • Most are relatively positive on China, with 86% expecting 2011 GDP growth to come in above 8% and 32% expecting growth of over 9%. • While monetary tightening has been ongoing for some time, the...

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Social Network - Why So LinkedIn?

May 11, 2011 by EconMatters   Comments (0)

By EconMatters Dubbed as the Facebook of business professionals, Linkedin has expanded into more than 200 countries and territories with 101.5 million members worldwide by the end of March.  That's 12 million members more than it had at the end of 2010. SFGate quoted a document Linkedin filed with the U.S. Securities and Exchange Commission (SEC) "While it took us nearly 500 days to reach our first 1 million members, during the second half of 2010, on average, we added more than a million new members every 10 days."Based in Mountain View, California,...

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Don't Give Up On Commodities Just Yet (Guest Post)

May 9, 2011 by EconMatters   Comments (0)

By Commodities Now The prices for many commodities suffered the worst week in recent memory at the start of May.  Oil prices dipped below $100 per barrel, gold fell below $1,500 an ounce and silver gave back much of the past month’s gains by falling to the $35 an ounce level. The prices for other commodities such as sugar, tin, nickel, aluminum, lead and copper also pulled back. Immediately, headlines on websites such as Marketwatch, Bloomberg and SmartMoney read “Has the Commodity Bubble Popped?” and “Imploding Commodities Complex.” So, Is this the end? Has the great...

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Going Behind The Rise in Oil and Food Prices (Guest Post)

May 8, 2011 by EconMatters   Comments (0)

By Ilene Danny Schechter at Al Jazeera, interviews Philip R. Davis, founder of Phil's Stock World, about excessive speculation in the oil markets. Speculators and free market believers may argue that they are not to blame, they are simply trying to make money by following the trends and not holding onto cash, as the Fed is busily devaluing the U.S. Dollar. There is some merit in that argument, but that doesn't solve the problem. Addressing the problem begins with identifying the underlying causes - what is enabling and encouraging so much speculation? What kind of...

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Is Euro Another Bullish Argument For Gold and Silver? (Guest Post)

May 8, 2011 by EconMatters   Comments (0)

By Ashraf Laidi This headline-charged first week of May has been dominated by the announced death of Osama Bin Laden, a historic 5-cent retreat in the euro and the greatest weekly decline in silver. But the week could have witnessed a positive transition (another one) in favour of precious metals. Here is why; The selloff in metals was initiated by a knee-jerk reaction to Osama Bin Laden's death on the argument that the safe haven trade in favour of precious metals may no longer valid. The gold and silver sell-off were limited to 5%, before a modest rebound ensued in Monday Europe. But...

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Gasoline Prices: Fast and Furious To Spike, But Slow and Reluctant to Fall? (Guest Post)

May 7, 2011 by EconMatters   Comments (0)

By Bob van der Valk This year's Cinco de Mayo Mexican holiday may go down in US oil trading history as the day the oil prices spun down into their biggest free fall. Oil traders have already started calling it: "Jueves de Carniceria", which loosely translates to "Killer Thursday". However, motorists looking for lower pump prices were disappointed when the average price for unleaded regular gasoline dropped a mere penny from $3.99 to $3.98 a gallon. The gasoline spot market prices are quick to react to any changes in the price of crude oil but there are a couple of steps in...

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Speculation Does Not Explain High Oil and Gasoline Prices? Please!!

May 7, 2011 by EconMatters   Comments (0)

By EconMatters WTI (West Texas Intermediate) Crude Oil futures traded at its lowest in almost two months in New York on Thursday, May 5 in its biggest selloff in two years, plunging 8.6% on the day to below the $100 mark (Fig. 1).  Brent crude on ICE also dropped as much as $12.17, or 10%, which was the largest in percentage terms not seen since the Lehman Brothers financial crisis, and the largest ever in absolute terms, according to FT. The epic waterfall was partly due to the combination of a strengthening dollar after European Central Bank President Jean-Claude Trichet...

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The Bin Laden Effect on the Oil and Gasoline Market (Guest Post)

May 5, 2011 by EconMatters   Comments (0)

By Bob van der Valk The oil market turned around this week and spot market gasoline and diesel prices in turn went back down the week of May 1, 2011. This goes against the grain of what usually happens when American Petroleum Industry (API) and Department of Energy (DOE) inventory reports show draws for both gasoline and diesel. The average price for unleaded gasoline in the US is $3.982 per gallon today and may touch $4 by this Friday. But the demand for gasoline is down with numbers from March showing a steep decline showing the effects of the ever increasing gasoline prices....

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