This document discusses commodities and commodity investing. It defines commodities as generic goods that are supplied without differentiation by producers. It outlines the history of commodity trading from ancient times to modern commodity markets and exchanges. It argues that commodities should be included in investment portfolios to provide diversification and lower volatility. The document also uses the example of the oil market, outlining factors like OPEC production and future supply and demand trends to demonstrate why oil prices may remain high in the short-term despite the current economic crisis.
Discussion on Fisher's Theory and it's effect on money supply.
The Fisher effect is an economic theory that describes the relationship between inflation and both real and nominal interest rates. The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.
Visit us on www.norrenberger.com for more insight.
The presentation explains that overall fundamental analysis in a company like economic, industry, and company analysis its gives a brief explanation about that.
A hedge is an investment position intended to offset potential losses/gains that
may be incurred by a companion investment. In simple language, a hedge is
used to reduce any substantial losses/gains suffered by an individual or an
organization.
A hedge can be constructed from many types of financial instruments, including
stocks, exchange-traded funds, insurance, forward contracts, swaps, options,
many types of over-the-counter and derivative products, and futures contracts.
Public futures markets were established in the 19th century[1] to allow
transparent, standardized, and efficient hedging of agricultural commodity
prices; they have since expanded to include futures contracts for hedging the
values of energy, precious metals, foreign currency, and interest rate
fluctuations.
Arbitrage pricing theory & Efficient market hypothesisHari Ram
Arbitrage pricing theory (APT) is a multi-factor asset pricing model based on the idea that an asset's returns can be predicted using the linear relationship between the asset's expected return and a number of macroeconomic variables that capture systematic risk.
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
A bond issued in a country or currency other than that of the investor or broker. They include Eurobonds, which are issued in a foreign currency, foreign bonds, which are issued by a foreign government or corporation in the domestic market, and global bonds, which are issued in both domestic and international markets.
It gives overall idea about the mutual funds. History of Mutual Funds, how it works and the types of mutual funds. Advantages and disadvantages of mutual funds and why mutual funds are subjected to market risks.
Using analysis on a particular market instrument or stock can be hard to do manually but today's market analysis software and trading platforms often have features that can does this even on multiple items or samples.
Discussion on Fisher's Theory and it's effect on money supply.
The Fisher effect is an economic theory that describes the relationship between inflation and both real and nominal interest rates. The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.
Visit us on www.norrenberger.com for more insight.
The presentation explains that overall fundamental analysis in a company like economic, industry, and company analysis its gives a brief explanation about that.
A hedge is an investment position intended to offset potential losses/gains that
may be incurred by a companion investment. In simple language, a hedge is
used to reduce any substantial losses/gains suffered by an individual or an
organization.
A hedge can be constructed from many types of financial instruments, including
stocks, exchange-traded funds, insurance, forward contracts, swaps, options,
many types of over-the-counter and derivative products, and futures contracts.
Public futures markets were established in the 19th century[1] to allow
transparent, standardized, and efficient hedging of agricultural commodity
prices; they have since expanded to include futures contracts for hedging the
values of energy, precious metals, foreign currency, and interest rate
fluctuations.
Arbitrage pricing theory & Efficient market hypothesisHari Ram
Arbitrage pricing theory (APT) is a multi-factor asset pricing model based on the idea that an asset's returns can be predicted using the linear relationship between the asset's expected return and a number of macroeconomic variables that capture systematic risk.
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
A bond issued in a country or currency other than that of the investor or broker. They include Eurobonds, which are issued in a foreign currency, foreign bonds, which are issued by a foreign government or corporation in the domestic market, and global bonds, which are issued in both domestic and international markets.
It gives overall idea about the mutual funds. History of Mutual Funds, how it works and the types of mutual funds. Advantages and disadvantages of mutual funds and why mutual funds are subjected to market risks.
Using analysis on a particular market instrument or stock can be hard to do manually but today's market analysis software and trading platforms often have features that can does this even on multiple items or samples.
This Presentation is about the Financial Market in India.
Aim is to provide basic information regarding Stock market, Bombay Stock Exchange(BSE) and National Stock Exchange of India (NSEI).
Oil Prices have been extremely volatile during the last decade due to extensive speculative pressures on the commodity. in this episode of Energy Risk Management Series we show one of the methods of countering the same.
Petroleum Executive of the Year Keynote, by H.E. Khalid Al-FalihEnergy Intelligence
37th Oil & Money Conference
www.oilandmoney.com
For more information news@oilandmoney.net
Keynote by H.E. Khalid Al-Falih, Minister for Energy, Industry and Mineral Resources, Kingdom of Saudi Arabia and Chairman of the Board of Directors - Saudi Aramco
EY Price Point: global oil and gas market outlook (Q4, October 2020)EY
Oil and gas prices have recovered steadily from their lows and are relatively stable, but that stability is supported by the combination of purposeful withholding of production by oil-producing countries and economic stress on upstream independents. Oil prices closed the quarter roughly where they started it, while refining spreads were down slightly. LNG spreads were substantially higher at the end of Q3 than they were at the beginning of the quarter but are still roughly half of what is generally thought of as sustainable.
Going forward, the market will be looking closely at how the economy and demand respond to new developments with respect to a potential COVID-19 vaccine and the US election.
Carbon Bubble - Making Sense of a "Fossil Market"Timon Henze
This presentation explores the impact of the so called 'carbon bubble' and how recent developments on the fossil fuel markets will influence financial decision making linked to it. The Dynamics of Oil Prices, CapEx, Cost-Investment-Decisions and Reserves is based with recent analyst data. A second part, obviously, discusses political mitigation proposals (divestment, de-subsidizing and extraction banning) and their rationale.
In this post, I try to discuss the structural changes causing oil price volatility. I also apply 'Game Theory' concepts to analyze the behavior of various stake holders. I conclude by making a prediction on oil prices based on my analysis.
An Investigation of Crude Oil and its Implication for Financial Markets Priesnell Warren ✔
This research paper seeks to unearth the possible repercussions of fluctuations in Crude Oil markets and how they will affect global trade and financial markets. Crude oil or Black Gold is one of the world’s most precious commodities as its change in price affects the entire economy.
EY Price Point: global oil and gas market outlook, Q2, April 2020EY
The first quarter of this year has seen some extraordinary events. As if chronic oversupply, prices stuck below sustainable levels, the looming energy transition, and investor pressure to decarbonize weren’t enough, our industry now faces a dramatic, but hopefully temporary, downturn in demand as a result of the ongoing COVID-19 outbreak.
Oil majors and traders role of opec,ocimf & intertankoKapilLamba6
Information and analysis of oil majors traders importance of them oil as commodity trading its importance and various agencies relate with smooth world wide operation of oil and petroleum products and regulation
EY Price Point: global oil and gas market outlookEY
As we close the second quarter of 2020, in most of Europe and Asia, the first (and hopefully last) wave of the COVID-19 crisis appears to be abating. In the parts of the US where the virus hit early, the profile has largely matched Europe’s, while in other parts, the urge to reopen businesses has trumped the desire to contain the virus and uncertainty looms. In the developing world, the crisis has just begun, but without the economic headroom and resources necessary to contain it. As the crisis unfolded, the effect on oil and gas demand has been predictable but difficult to gauge precisely and therefore difficult to manage.
Oil prices have crept up steadily as production has been curtailed through coordinated action (OPEC+) and because of economic reality (unconventional oil in North America). That trend has been subject to momentary spasms when bad news hit the market. It would be understandable if traders were nervous, and it seems that they are. Although nowhere near where it was at the peak of the crisis, option implied volatility is still at historically high levels. Gas markets, without the benefit of coordination on the supply side, continue to deal with the market implications of storage at or near capacity. Interfuel competition in power generation has always provided something of a floor, but those lows have been, and will continue to be, tested.
EY Price Point: global oil and gas market outlookEY
We enter 2021 on a note of cautious optimism for global health, the world economy, and the oil and gas markets. The first weeks of December brought approval in the US and the UK of the first of several COVID-19 vaccines. The speed with which vaccine development occurred is unprecedented, but certainly welcome. In the weeks following the early November announcement of 90+% effectiveness by the manufacturer of the first approved vaccine, the price of WTI crude oil increased by US$10/bbl to US$48/bbl, the highest level since early March. Sustainability hasn’t returned yet, and whatever time it takes to get the world to normal, it will take even longer for normalization within the oil and gas markets. Inventories remain at historically high levels and, optimistically, it will take until April before inventory returns to levels observed in the preceding five years. That’s an estimate, and there has obviously been some difficulty properly calibrating the expectations of how balance will return and how long it will take. In late November, OPEC met to adjust its output plans because of the anemic rebound in demand. In mid-December, the IEA lowered its demand forecast for 2021 due mostly to continued sluggishness in aviation fuel demand.
A mild winter has interrupted a recovery in North American natural gas prices after a run-up motivated by curtailed capital expenditures, upstream activity and production. After an initial meltdown, with cargo cancellations and dramatic price reversal, LNG markets have made a remarkable comeback, and the spread between Asia and Henry Hub has reached a level we haven’t seen in almost three years. It may be the case that interruption in FIDs has brought us to the cusp of a balance that can support reliable returns.
2. Agenda Introduction Commodities & Commodity Markets Origins & History Commodities in a Portfolio Current Trends Case Study : Oil Market Conclusions Managing Your Portfolio & Product Showcase
3. How did you start your day?(through the eyes of a commodity trader) It was a little cold so you decided to turn on the heating and made a mental note to order some more heating oil for the winter months (Oil : International Identifier - CLA). You sat down at your new IKEA table & chair set (Lumber: LBA) and poured some milk (Milk : DAU9) on your cornflakes (Wheat Future: W A). You had a glass of Orange Juice (Florida Orange Juice Future: JO). You were hungry so decided to have some bacon (Pork Bellies: PBA).Finally you had a strong cup of coffee (Arabica Coffee : KCA).to get yourself set for the day.
4. What are Commodities and what is the Commodity Market Defining Commodities: A good for which there is demand but it is supplied without difference by producers. The word commodity refers to the fact that the product is generic. But commodities while generic do not all have the same characteristics. Most pertinent is the issue of storage.
5.
6. As trade developed and led to specialisation there was a need for structure around how markets were regulated
9. The Commodity Market Open, regulated, transparent Large range of quoted commodities and exchanges Innovation continues as a good pace –example: Carbon Emissions Market. Generic Product - (so efficiencies in production are usually quickly taken on throughout the market) Non Production traders bring liquidity and efficiency and limit the existence of excessive profits
10. Commodities in a Portfolio Understandable Diversification Lower volatility for similar returns to equities Significant universe of exposures – each commodity is unique and has different fundamentals driving its price Traditionally Commodity Prices have been negatively correlated to other asset classes
11. Commodities – the black sheep of the investment markets Commodities should be a part of your portfolio
12. Current Trends in Commodities Significant growth in Commodity investing Correlation since the credit crunch last year is now running at all time highs. Commodities are beginning to become more forward looking More market participants and more sophisticated analysis Are Commodities the new Equity?
13.
14. Demand is unlikely to waver significantly unless renewable energy can make huge leaps forward
15.
16. Oil Supply & Demand Supply likely to remain an issue: International Energy Agency (IEA) forecasts a fall of 2.6m b/d. Last year we had a fall of 200,000 b/d. The first time since the 1980’s that we’ve had 2 consecutive years of contraction. OPEC has announced 3 separate price cuts since Sept to steady price falls. Much of the worlds easy oil has already been extracted. New discoveries tend to be smaller than previously. Merrill Lynch estimate that in order to maintain current output firms must find the equivalent of Saudi Arabia reserves every 2 years. Renewable energy is still not able to take up the slack Many of the largest reserves are in the hands of despots and dictators IEA forecast a cut of up to 20% in overall investment in the industry in 2009.
17.
18. World Energy consumption is forecast to increase steadily according to the International Energy Agency (IEA). Significantly most of this comes from non-OECD countries.
23. How will the current Crisis affected Oil Demand? Deep Recession Projection Pre-Crisis Projection
24.
25. China remerging on a solid growth path (Chinese authorities have erred on the side of growth and inflation)
26. Recent crisis already priced in to current predictions – Oil prices are back to their long term average
27. OPEC members unlikely to allow Oil revisit last years lowsReal price of Crude Oil 1947-2008
28. Conclusions Commodities markets can add diversification while reducing risks Operating on different but understandable fundamentals - a connection with real economy Commodities markets are not a generic asset class but are multi-layered and offer investors different opportunities Commodities represent an asset class which investors should take seriously and include in their portfolios Commodities as the new equities?
29. Managing Your Portfolio Markets are likely to be more volatile in the years ahead and investors will need to dedicate more time to their investment portfolios or hire professional risk managers Expect the return of a more macro data focus and for asset prices to respond accordingly 4 Pillars of Investing Liquidity Transparency Risk Return
