Showing posts with label COMMODITY. Show all posts
Showing posts with label COMMODITY. Show all posts
Oil Prices Explained by Economics
The oil industry, with its history of booms and busts, appears to be in the early stages of its latest downturn. The price of oil has plunged in recent months, reaching its lowest point in more than five years.
Q: Why is the price of oil dropping so fast? Why now?
A: This a complicated question, but it boils down to the simple economics of supply and demand.
U.S. domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once found a home in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices.
On the demand side, the economies of Europe and developing countries are weakening and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit.
Q: Who benefits from the price drop?
A: Any motorist can tell you gasoline prices have dropped more than a dollar a gallon in recent months. Diesel, heating oil and natural gas prices have also fallen sharply. All together, they represent the equivalent of a sizable tax cut - putting $1,000 or more in the pockets of the average family over the next year. Europeans and consumers around the world will enjoy similar benefits.
Q: Who loses?
A: For starters, oil-producing countries and states. Venezuela, Iran, Nigeria, Ecuador, Brazil and Russia are just a few petro states that will suffer economic and perhaps even political turbulence. Persian Gulf states are likely to invest less money around the world, and may cut aid to countries like Egypt.
In the United States, Alaska, North Dakota, Texas, Oklahoma and Louisiana will face economic challenges. Some smaller oil companies that are heavily in debt may go out of business, pressuring some banks that lend to them.
Q: What happened to OPEC?
The price of oil, as with other commodities, goes up and down. And in the past the Organization of the Petroleum Exporting Countries, known as OPEC, has frequently cut production to firm up prices. Iran, Venezuela and Algeria are pressing the cartel to do so again, but Saudi Arabia, the United Arab Emirates and other gulf allies are refusing to cut. At the same time, Iraq is actually pumping more.
Saudi officials have said that if they cut production and prices go up, they will lose market share and merely benefit their competitors. They say they are willing to see oil prices go much lower, but some oil analysts think they are merely bluffing.
Q: Is there a conspiracy to bring the price of oil down?
A: There are a number of conspiracy theories floating around. Even some oil executives are quietly noting that the Saudis want to hurt Russia and Iran, and so does the United States - motivation enough for the two oil-producing nations to force down prices. Dropping oil prices in the 1980s did help bring down the Soviet Union, after all.
But there is no evidence to support the conspiracy theories, and Saudi Arabia and the United States rarely coordinate smoothly. And the Obama administration is hardly in a position to coordinate the drilling of hundreds of oil companies seeking profits and answering to their shareholders.
Q: When are oil prices likely to recover?
A: Not anytime soon. Oil production is still increasing in the United States and some other countries. Many Wall Street banks are predicting that the oil price could fall as low as $40 a barrel in the coming months.
But production is likely to begin declining in the second half of the year, and then crude prices will also begin to recover. The history of oil is a history of booms and busts followed by more of the same.
2008: $104 2009: $46 2010: $85
2011: $96 2012: $104 2013: $100
2014: $98 2015 :$45 2016 :$ ??
Q: Why is the price of oil dropping so fast? Why now?
A: This a complicated question, but it boils down to the simple economics of supply and demand.
U.S. domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once found a home in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices.
On the demand side, the economies of Europe and developing countries are weakening and vehicles are becoming more energy-efficient. So demand for fuel is lagging a bit.
Q: Who benefits from the price drop?
A: Any motorist can tell you gasoline prices have dropped more than a dollar a gallon in recent months. Diesel, heating oil and natural gas prices have also fallen sharply. All together, they represent the equivalent of a sizable tax cut - putting $1,000 or more in the pockets of the average family over the next year. Europeans and consumers around the world will enjoy similar benefits.
Q: Who loses?
A: For starters, oil-producing countries and states. Venezuela, Iran, Nigeria, Ecuador, Brazil and Russia are just a few petro states that will suffer economic and perhaps even political turbulence. Persian Gulf states are likely to invest less money around the world, and may cut aid to countries like Egypt.
In the United States, Alaska, North Dakota, Texas, Oklahoma and Louisiana will face economic challenges. Some smaller oil companies that are heavily in debt may go out of business, pressuring some banks that lend to them.
Q: What happened to OPEC?
The price of oil, as with other commodities, goes up and down. And in the past the Organization of the Petroleum Exporting Countries, known as OPEC, has frequently cut production to firm up prices. Iran, Venezuela and Algeria are pressing the cartel to do so again, but Saudi Arabia, the United Arab Emirates and other gulf allies are refusing to cut. At the same time, Iraq is actually pumping more.
Saudi officials have said that if they cut production and prices go up, they will lose market share and merely benefit their competitors. They say they are willing to see oil prices go much lower, but some oil analysts think they are merely bluffing.
Q: Is there a conspiracy to bring the price of oil down?
A: There are a number of conspiracy theories floating around. Even some oil executives are quietly noting that the Saudis want to hurt Russia and Iran, and so does the United States - motivation enough for the two oil-producing nations to force down prices. Dropping oil prices in the 1980s did help bring down the Soviet Union, after all.
But there is no evidence to support the conspiracy theories, and Saudi Arabia and the United States rarely coordinate smoothly. And the Obama administration is hardly in a position to coordinate the drilling of hundreds of oil companies seeking profits and answering to their shareholders.
Q: When are oil prices likely to recover?
A: Not anytime soon. Oil production is still increasing in the United States and some other countries. Many Wall Street banks are predicting that the oil price could fall as low as $40 a barrel in the coming months.
But production is likely to begin declining in the second half of the year, and then crude prices will also begin to recover. The history of oil is a history of booms and busts followed by more of the same.
2011: $96 2012: $104 2013: $100
2014: $98 2015 :$45 2016 :$ ??
IMPACT OF IMPORT DUTY ON SILVER ... AND HOW TO CALCULATE ...
IMPACT: SILVER to attract additional duty of Rs 900 per KG
COMEX SILVER 21.5$
USDINR 61
SPOT VALUE = 21.5* 61 = 1311
SPOT VALUE PER OUNCE = 1311 * 32.15 [TROY OUNCE ] = 42165
IMPORT DUTY 10% = 4216
TOTAL SILVER VALUE = 42165 + 4216 = 46381
OTHER COST = 0.10 = 46.38 RS
FINAL PRICE OF SILVER PER KG = 46427
IMPACT OF IMPORT DUTY ON GOLD ... AND HOW TO CALCULATE ...
Impact: Gold to attract additional duty of Rs 520 per 10 grams
COMEX GOLD 1335
USDINR 61
SPOT VALUE = 1335* 61 = 81435
SPOT VALUE PER 10 GM = 81435/3.11 [TROY OUNCE ] = 26190
IMPORT DUTY 10% = 2619
TOTAL GOLD VALUE = 26190 + 2619 = 28809
OTHER COST = 0.10 = 28 RS
FINAL PRICE OF GOLD PER 10 GM = 28837
COMEX GOLD 1335
USDINR 61
SPOT VALUE = 1335* 61 = 81435
SPOT VALUE PER 10 GM = 81435/3.11 [TROY OUNCE ] = 26190
IMPORT DUTY 10% = 2619
TOTAL GOLD VALUE = 26190 + 2619 = 28809
OTHER COST = 0.10 = 28 RS
FINAL PRICE OF GOLD PER 10 GM = 28837
GOLD PRICE WILL CRASH TO US$ 825 AN OUNCE SOON.
USA WANTS TO TEACH A SEVERE LESSON TO ASIAN CENTRAL BANKS, RUSSIA, SINGAPORE, CHINA INDIA, SAUDI KOREA JAPAN FOR abandoning US$ and questioning the supremacy of ANGLO SAXON CURRENCY MANAGEMENT.
THE AMERICAN EXPRESS BANK AND DEUTSCHE BANK ARE INDICATING GOLD TO SETTLE US$1050 AN OUNCE.
OBAMA / CIA HAS ordered a secret mission to reduce the asset value of Asians dramatically to the extend of 2 trillion dollars to penalize Asians for questioning supremacy of US$ currency and put Europe in serious trouble to ensure Germans do not raise as threat to Anglo Saxon Supremacy.
During Ronald Reagan presidency the scheme to exchange US$ 35 for a ounce of Gold was abandoned after USA bought 8000 tons of GOLD using paper printed with words US$. USA refused to exchange back the GOLD for US$ as promised. on the first day of protest demanding gold back people were disposed with no trace. No one came back again demanding gold in exchange for US$.
USA will not sell gold like India which pledged gold for 500 million loan with IMF. USA will print a paper and ask you to supply goods. If you refuse you will die like Saddam. No country in Europe is pledging gold for loan with IMF. Europe also print paper named Euro to buy goods and services.
To crush Iran, Russia, North Korea the resources in these countries should be made very less in value. Iran has amassed gold since Iran was not allowed to deal in US$ or Euro. Gold stock with North Korea is also very high .
So making Gold to a low value of US$ 825 an ounce or even below to US$ 400 an ounce , USA is prepared to do all that is required to contain China, Russia, Iran, North Korea and make them poor.So act carefully. Do not get carried away with false reports in TV.
THE AMERICAN EXPRESS BANK AND DEUTSCHE BANK ARE INDICATING GOLD TO SETTLE US$1050 AN OUNCE.
OBAMA / CIA HAS ordered a secret mission to reduce the asset value of Asians dramatically to the extend of 2 trillion dollars to penalize Asians for questioning supremacy of US$ currency and put Europe in serious trouble to ensure Germans do not raise as threat to Anglo Saxon Supremacy.
During Ronald Reagan presidency the scheme to exchange US$ 35 for a ounce of Gold was abandoned after USA bought 8000 tons of GOLD using paper printed with words US$. USA refused to exchange back the GOLD for US$ as promised. on the first day of protest demanding gold back people were disposed with no trace. No one came back again demanding gold in exchange for US$.
USA will not sell gold like India which pledged gold for 500 million loan with IMF. USA will print a paper and ask you to supply goods. If you refuse you will die like Saddam. No country in Europe is pledging gold for loan with IMF. Europe also print paper named Euro to buy goods and services.
To crush Iran, Russia, North Korea the resources in these countries should be made very less in value. Iran has amassed gold since Iran was not allowed to deal in US$ or Euro. Gold stock with North Korea is also very high .
So making Gold to a low value of US$ 825 an ounce or even below to US$ 400 an ounce , USA is prepared to do all that is required to contain China, Russia, Iran, North Korea and make them poor.So act carefully. Do not get carried away with false reports in TV.
CRUDE OIL WEEKLY CHART
In technical analysis, the range of prices between a security's resistance level and support level. A resistance level is the price below which a given security does not normally fall, and a support level is the price above which it does not usually rise. A trading channel is particularly useful to technical analysts as it enables them to recommend buying the security when it is toward the bottom and selling when it is near the top. A trading channel may be steady, or it may be gradually rising or falling.
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GOLD RESERVE
Gold has been rising since 2001 and its near vertical rise over the last two years helps explain some of the recent fascination, but political actions have Helped as well. In the United States, Rep. Ron Paul and others have called for a return to the gold standard. Elsewhere, Venezuelan President Hugo Chávez recently nationalized his country’s gold industries, and some analysts have said countries should dip into their gold reserves to alleviate the sovereign debt crisis. With all these recent stories, we wanted to see which countries actually have the most gold in their reserves, based on information from the World Gold Council.
Venezuela Tonnes: 322.9 % of reserves: 60.8%
#10: India
The world’s second most populous country barely made the top 10 list…[even though it] consumes more gold than any other Tonnes: 557.7 % of reserves: 8.7%
#9: Netherlands Although known for being a fairly liberal society, the Netherlands is fairly conservative in its financial reserves… Tonnes: 612.5 % of reserves: 58.9%
#8: Japan Gold only constitutes a very small percentage of Japan’s overall reserves. Like another Asian country on this list, Japan holds a significant number of U.S. dollars in its reserves… Tonnes: 765.2 % of reserves: 3.3%
#7: Russia As the world’s number five gold producing nation, Russia’s gold reserves have grown significantly over the last couple years… Tonnes: 836.7 % of reserves: 7.7%
#6: Switzerland Beyond watches, chocolate and pocket knives, Switzerland is best known as a financial center… Tonnes: 1,040.1 % of reserves: 17.8%
#5: China [Although China is] the world’s most populous nation…[its] gold holdings are only 1.6% of its total reserves…[given the fact that] it has more than $3 trillion in U.S. dollars in its reserve. Tonnes: 1,054.1 % of reserves: 1.6%
#4: France The French National Bank, Banque De France, is home to the country’s gold holdings… Tonnes: 2,435.4 % of reserves: 66.2%
#3: Italy Italy is the only top 10 country to also make the prestigious “PIIGS” list of Eurozone countries with sovereign debt problems (Portugal, Italy, Ireland, Greece and Spain), although Portugal just missed the list at number 12… Tonnes: 2,451.8 % of reserves: 71.2%
#2: Germany The largest economy in the Eurozone also has the largest reserve of gold… Tonnes: 3,401.0 % of reserves: 71.4%
#1: United States The United States holds nearly 30% of the 27,372.6 tonnes of gold in all sovereign reserves. Although Fort Knox is the iconic location of U.S. gold, more gold actually is stored in the Federal Reserve Bank of New York’s underground vault, although not all of it belongs to the U.S. government Tonnes: 8,133.5 % of reserves: 74.2%
Venezuela Tonnes: 322.9 % of reserves: 60.8%
#10: India
The world’s second most populous country barely made the top 10 list…[even though it] consumes more gold than any other Tonnes: 557.7 % of reserves: 8.7%
#9: Netherlands Although known for being a fairly liberal society, the Netherlands is fairly conservative in its financial reserves… Tonnes: 612.5 % of reserves: 58.9%
#8: Japan Gold only constitutes a very small percentage of Japan’s overall reserves. Like another Asian country on this list, Japan holds a significant number of U.S. dollars in its reserves… Tonnes: 765.2 % of reserves: 3.3%
#7: Russia As the world’s number five gold producing nation, Russia’s gold reserves have grown significantly over the last couple years… Tonnes: 836.7 % of reserves: 7.7%
#6: Switzerland Beyond watches, chocolate and pocket knives, Switzerland is best known as a financial center… Tonnes: 1,040.1 % of reserves: 17.8%
#5: China [Although China is] the world’s most populous nation…[its] gold holdings are only 1.6% of its total reserves…[given the fact that] it has more than $3 trillion in U.S. dollars in its reserve. Tonnes: 1,054.1 % of reserves: 1.6%
#4: France The French National Bank, Banque De France, is home to the country’s gold holdings… Tonnes: 2,435.4 % of reserves: 66.2%
#3: Italy Italy is the only top 10 country to also make the prestigious “PIIGS” list of Eurozone countries with sovereign debt problems (Portugal, Italy, Ireland, Greece and Spain), although Portugal just missed the list at number 12… Tonnes: 2,451.8 % of reserves: 71.2%
#2: Germany The largest economy in the Eurozone also has the largest reserve of gold… Tonnes: 3,401.0 % of reserves: 71.4%
#1: United States The United States holds nearly 30% of the 27,372.6 tonnes of gold in all sovereign reserves. Although Fort Knox is the iconic location of U.S. gold, more gold actually is stored in the Federal Reserve Bank of New York’s underground vault, although not all of it belongs to the U.S. government Tonnes: 8,133.5 % of reserves: 74.2%
IMPACT OF IMPORT DUTY ON SILVER ... AND HOW TO CALCULATE :)
IMPORT DUTY ON SILVER Changed To 6% of Value From Flat Rs1500 per kilogram
Impact: Silver to attract additional duty of Rs 1494 per kilograms.
Impact: Silver to attract additional duty of Rs 1494 per kilograms.
COMEX SILVER CMP 30.50
USDINR RRR 50.90
SPOT VALUE = 30.50* 50.90 = 1552.45
SPOT VALUE PER OUNCE = 1552.45 * 32.15 [TROY OUNCE ] = 49911.26
CUSTOM DUTY OLD 1500 FLAT RS NEW = 6% = 2994.67
TOTAL SILVER VALUE = 49911.26 + 2994.67 NEW DUTY = 52905.93
OTHER COST = 0.10 = 52.90 RS
FINAL PRICE OF SILVER PER KG = 52958.83
USDINR RRR 50.90
SPOT VALUE = 30.50* 50.90 = 1552.45
SPOT VALUE PER OUNCE = 1552.45 * 32.15 [TROY OUNCE ] = 49911.26
CUSTOM DUTY OLD 1500 FLAT RS NEW = 6% = 2994.67
TOTAL SILVER VALUE = 49911.26 + 2994.67 NEW DUTY = 52905.93
OTHER COST = 0.10 = 52.90 RS
FINAL PRICE OF SILVER PER KG = 52958.83
IMPACT OF IMPORT DUTY ON GOLD ... AND HOW TO CALCULATE :)
IMPORT DUTY ON GOLD Changed To 2% of Value From Flat Rs300 per 10 GRAMS
Impact: Gold to attract additional duty of Rs 246 per 10 grams
Impact: Gold to attract additional duty of Rs 246 per 10 grams
COMEX GOLD CMP 1665
USDINR RRR 50.90
SPOT VALUE = 1665* 50.90 = 84748.5
SPOT VALUE PER 10 GM = 84748.5/3.11 [TROY OUNCE ] = 27250.32
CUSTOM DUTY OLD 300 RS NEW = 545
TOTAL GOLD VALUE = 27250 + 545 NEW DUTY = 27795
OTHER COST = 0.10 = 27.79 RS
FINAL PRICE OF GOLD PER 10 GM = 27822.79
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