Commodities

TNK-BP owners’ Rosneft ire seems like a ploy

31 Jan 2011

A court case launched by the oil firm's oligarch coowners is ostensibly aimed at scuppering BP's Rosneft deal or forcing TNKBP's inclusion, but neither outcome is likely. The real aim is to pressure BP to make the concessions that would fuel TNKBP's international expansion.

Exxon’s Rosneft deal mimics BP without strings

27 Jan 2011

The U.S. oil major's Black Sea development pact is a smaller version of BP's deal, with a crucial difference: there's no share swap. The reason? Exxon isn't desperate.

U.S. oil independence no longer a joke

26 Jan 2011

America imports 10 mln barrels of crude daily. Presidents have paid lip service to reducing this dependence since the 1970s. But as drivers shun gas guzzlers and U.S. production rises, imports could be cut in half this decade. Oil selfsufficiency could even be within reach.

Egypt’s handouts look unsustainable

25 Jan 2011

Subsidies have been stepped up by governments across the Middle East to stem social unrest following the landmark uprising in Tunisia. Oilrich Gulf states can afford this bribery; but not oilpoor highly populated countries such as Egypt.

Sarkozy’s G20 plans fail to impress

24 Jan 2011

Though it is France's turn in the G20 chair, it's hard to see that President Sarkozy's calls for more commodity markets regulation, a reformed world monetary system and a financial transactions tax will gain much traction. His focus on food prices may not be unhelpful, however.

Cargill valuation validates Wall St rules of thumb

19 Jan 2011

With its Mosaic sale, the world s largest private firm has lifted the kimono a bit. Newly available figures put Cargill s value at about $55 bln. That s roughly the same as had been estimated using multiples of publicly traded rival ADM. High finance isn t often rocket science.

Cargill gives BHP a second shot at potash

18 Jan 2011

The biggest private U.S. firm is spinning off its majority stake in $37 bln phosphate and potash producer Mosaic. The complex deal will create three share classes and take a while but should still invite suitors in time. And Minnesota may be more welcoming than Saskatchewan.

Why it’s time to sell the family silver

7 Jan 2011

Prices have risen so sharply that London antique dealers are buying Edwardian cutlery for scrap. Bulls point to the perils of paper money and the white metal's cheapness relative to its yellow rival. But oversupply means silver may be fool's gold, not the poor man's alternative.

Commodities cast wary eye on dollar and liquidity

6 Jan 2011

Despite good economic news, commodities have wobbled this week. Oil, food and metals prices all thrived on a weak dollar and low interest rates. But growth, inflation and higher interest rates point to a firmer dollar and tighter liquidity. Commodities may be volatile in 2011.

Alcoa may finally be ripe for picking

6 Jan 2011

The $17 bln aluminum producer is a mainstay on the takeover talk circuit. But a successful deal for a cyclical company hinges on timing. With the economy ramping up and a trio of eager and frustrated buyers BHP, Rio and Vale in the wings, Alcoa s time may have come.

Investors still over-gloomy on BP

6 Jan 2011

The UK oil major's shares have shrugged off a damning White House report into the Gulf of Mexico spill. It's still hard to be confident about the final tab for the disaster. But based on the latest estimates, a Breakingviews calculator suggests investors are on the bearish side.

De-globalization forces remain strong into 2011

4 Jan 2011

Antidumping policies, capital taxes and currency manipulation erected global market barriers in the Great Recession, while globalizing actions have been few. In 2011, deglobalization could gather pace if commodities continue to surge or if there's another financial crisis.

Oil bulls may have to pull in their horns

29 Dec 2010

They say an intensifying struggle to lift output will collide with unstoppable Asian expansion to push the oil price above $100 a barrel. In fact, the cost of crude may be held down by a halving of demand growth as producers from Russia to Africa via Brazil ramp up supply.

Dollar rally has further to run

10 Nov 2010

Far from collapsing on QE2, the greenback has bounced. A sick euro zone favours the dollar over the single currency. A wave of risk aversion is possible. Equally, improving U.S. economic data raises the chances of a broad dollar recovery.

World Bank’s gold standard lite idea not crackpot

8 Nov 2010

The world is unsettled by QE2 and currency wars. Robert Zoellick, the World Bank head, is saying gold could serve as some sort of currency reference point. Such a scheme could be used to push up the value of China's currency. Whether Beijing plays ball is another matter.

Private sector should lead gold standard adoption

8 Nov 2010

A proposal from the World Bank boss to use gold as a reference point could prove destabilizing. Like the Bretton Woods system, such a governmentrun peg would break under stress. A better approach would flip the monetary order and use gold as a private means of global exchange.

Potash shareholders should just say no to BHP bid

2 Nov 2010

Not because Saskatchewan needs protecting, but rather because BHP s offer is too low relative to share rallies of rival fertilizer groups. Agrium s have surged a third since BHP s bid, while Mosaic s and CF s added more than 40 pct. On this basis alone, Potash is a $150 stock.

Potash looks like Cadbury, without the chocolate

29 Oct 2010

The Canadian fertilizer group s battle against BHP resembles the one Cadbury waged before folding to Kraft. The similarities include lack of competing bids, noisy politics and antsy shareholders. Barring a government shocker, it s hard to see a wildly different outcome.

Corn chaos casts cloud over commodities trading

14 Oct 2010

Violent swings in corn prices following recent contradictory statistics have exposed flaws in the way commodity markets work. The latest surge threatens a food crisis for the poor even though the global harvest is the thirdhighest ever. The market is not working for endusers.

Copper trackers don’t glitter like gold

13 Oct 2010

New basemetals exchangetraded funds look riskier than their preciousmetals counterparts because they may hold a higher proportion of global supply. That could cause shortfalls and price spikes for copper, tin and the like and gluts once investors inevitably lose interest.