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A small, last minute cash call…
Three Alphavillans are running around Canary Wharf in East London this evening in support of the British Heart Foundation.
Left to right: Lisa Pollack, David Keohane and Masa Serdarevic
Click here to make it worth their while.
Greenshoes, Facebook phantoms and ETF magic
Successful or not, Facebook’s IPO has taught us one very important thing over the last two days.
The blogosphere/Twittersphere knows extremely little about greenshoe IPO mechanics. And yet, because who shouts loudest makes the most waves…the idea that Morgan Stanley had “lost face”
Real estate won’t be supporting Chinese steel demand much longer
Something is up with China’s steel production. It reached record levels in March, driving up expectations of rising coking coal and iron ore prices. As the FT and Reuters have reported, there are accounts of both thermal coal and iron ore shipments being deferred or even defaulted on,
Is the Lafite bubble about to pop?
Wine is not something FT Alphaville often writes about but we all need a break from the euro crisis, and this chart caught our attention. It’s the Liv-ex Fine Wine 50 index, which tracks the daily price movements of the most heavily traded commodities in the fine wine market – Bordeaux first growths. It has fallen off a cliff in the past few months.
A contrarian view of China’s power data
Is the slowdown in China’s electricity output growth a sign that the life is going out of the country’s economy?
It’s not been the only poorly-performing economic indicator out of China recently — there’s also trade,
What happens if the Chinese government cracks down on all copper ‘financing deals’?
Goldman Sachs’ latest commodity note considers the influence of China’s bonded warehouses, chock-full of copper, on the underlying market for the metal.
First, they admit that the popularity of copper financing deals led to about 640-650kt of copper being stored in Chinese warehouses at its peak at the end of April.
An LNG headache, caused by an unconventional gas headache
Australia, we’ve heard a lot lately, is set to overtake Qatar as the world’s biggest LNG producer by about 2020. The first shipment from the big Western Australian Pluto development set sail last month and things looked somewhat rosy for Woodside Petroleum,
The “other reportables” oil mystery
From John Kemp at Reuters on Monday (our emphasis):
Hedge funds and other money managers reduced their long position in U.S. crude by the equivalent of nearly 54 million barrels of oil, the largest one-week decline since at least June 2006,
This wasn’t Chesapeake’s week, really
As part of our asset monetization planning and capital expenditure budgeting process, we closely monitor the resulting effects on the amounts and timing of our sources and uses of funds, particularly as they affect our ability to maintain compliance with the financial covenants of our corporate revolving bank credit facility.
Chesapeake’s prepay deals
Some good information is starting to come out about the nature of the liabilities Chesapeake’s CEO Aubrey McClendon managed to saddle the company with.
As the Wall Street Journal reported on Thursday (our emphasis),
Brent reigns supreme
Back in early 2011, a very intriguing thing happened in the oil markets.
As if by magic — (well, over the period of about a couple of months) — the market collectively and spontaneously moved from using WTI as its primary benchmark for pricing product spreads over to the Brent contract.
China’s post-stimulus metals demand growth could actually be flat
Here’s a bearish take on what the post-stimulus, rebalancing Chinese economy will mean for demand of steel, copper and aluminium:
Adjusting to a new paradigm: We see a no/low growth scenario off what is now a very high base level of demand as a realistic rather than a disaster scenario
[...]
A low-/no-growth scenario restores China to its pre-stimulus trend;
Here’s where all the oil hedgers have gone…
Last week we wrote about John Kemp’s column pointing out that CFTC data suggests hedgers — those who are exposed to physical prices through their business operations — fuel resellers and others hedge against their operational exposure to oil prices — collectively had the smallest net short position in six years in late April.
The subpriming of commodities
Is the new fad for securitising commodities creating dangerous parallels with the subprime crisis? It’s an observation we made the other day. But it turns out we’re not the only ones to share this view.
You call that a credit bubble? This is a credit bubble!
The famous (implied) last words of Crocodile Edwards — a.k.a SocGen uber bear, Albert Edwards — this Thursday.
Following in the foot steps of colleague Dylan Grice’s episode of Australia bashing the other week,
An AUD tale of correlation lost
The Australian dollar has veered away from its usual path. *Bad Aussie.*
But there is a widespread belief it will have to eventually find its way back. How quickly it does so, however, is open to debate.
Marginal oil production costs are heading towards $100/barrel
Bernstein’s energy analysts have looked at the upstream costs for the 50 biggest listed oil producers and found that — surprise, surprise — “the era of cheap oil is over”:
Tracking data from the 50 largest listed oil and gas producing companies globally (ex FSU) indicates that cash,
Is curve alpha being arbitraged away?
Investors looking for commodity exposure through fund offerings usually have one of two basic choices. They can opt for pure long strategies via funds which take positions in the underlying physical commodities or which perpetually roll the same position over and over in the futures market,
Why China’s commodities demand is different
A lot of optimistic projections for China’s commodities demand look something like this:
The premise is fairly straightfoward: you take the country’s current level of GDP per capita, and compare its steel (or whatever) consumption per capita to what other nations’ consumption levels were at that point,
Dark inventory, a volatility shock absorber
From oil to copper, something strange is going on with commodity inventories.
Official stocks are rising across numerous commodities, but analysts and traders swear fundamentals remain tight, while prices stay supported:
Where have all the oil hedgers gone?
An interesting chart from John Kemp at Reuters on Monday (click to enlarge):
The chart breaks out which players are net short or long of Nymex and Ice light sweet oil at any particular time.
The groups are defined by the CFTC and consist of five main categories:
China is being buried alive in copper
According to Wikipedia, compulsive hoarding is a disorder characterized by the excessive acquisition and inability or unwillingness to discard large quantities of objects that would seemingly qualify as useless or without value.
Hubris and other signs of trouble ‘down under’
Australia is rich in iron ore, coal and copper … and its stock of hubris seems to be growing.
After a recent trip to the “quarry in China’s backyard” SocGen’s Dylan Grice is even more worried about its economy than he was beforehand.
Saudi oil puzzle, continued
From the commodities research team at Goldman Sachs on Wednesday:
Saudi Arabian crude oil inventories built by 35.4 million barrels in the December-February period, adding 390 thousand b/d to world oil demand,
Glencore, an investigative report
Kudos to Foreign Policy for spending a year investigating Glencore.
Did you know, for example, that the name “Glencore” comes from: GLobal ENergy COmmodities and REsources? According to Foreign Policy,
The consummation of the Shell♥Cove romance?
From this morning’s RNS (with our emphasis):
Further to the announcement of a possible offer by Shell Bidco for Cove on 22 February 2012, the boards of directors of Cove and Shell Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Shell Bidco for the entire issued and to be issued share capital of Cove.
The unwitting move towards a global gold standard
Professor Lew Spellman, from the McCombs School of Business at the University of Texas at Austin, has posted on on what he calls gold’s changing role in the global economic landscape.
Amongst other things,
Could US natural gas run out of storage capacity?
We keep reading about how US natural gas prices are depressed because of the glut of supply and unseasonably warm weather, driving down demand. Hard to argue with this – gas production has boomed since 2009 and the winter in North America has been rather balmy.
Peak oil goes mainstream (again)
Well, The Economist is talking about it in a non-sneery way.
Okay, perhaps that’s not fair — only in February the newspaper likened oil markets to a horror movie: with prices likely to stay high and tight capacity raising the risk of future price spikes.
Is China at it again?
Sean Corrigan at Diapason Commodities has sent us another fascinating chart. It shows the hot money inflows into China which are unaccounted for by the sum of the trade balance, FDI, interest earned and FX revaluations.