[tugboat]

Question - I have $50,000 US$ I want to invest but might not be able to access it for 6 months. I'm not interested in making a killing (that would be fine though!) but do not want to loose my shirt either. I'm leaning towards gold/silver with a storage option since I won't be in a position to take physical possesion. Any suggestions would be much appreciated.

[Marklar]

You may want to check out Kitco's (kitco.com) gold/silver pool. They sell at a small markup but without trading the actual futures I think it's a good way to go. I bought some silver from them back when it was right under $9. They'll hold it for you unless you request shipment.

I've also heard something about a silver ETF that was recently approved. Looking forward to that one.

[joewp]

$this->bbcode_second_pass_quote('Marklar', '
')I've also heard something about a silver ETF that was recently approved. Looking forward to that one.

[CARVER]

Here is a theory of the Silver ETF buying Buffet's silver stash, as it seems the only way to acquire such a huge additional amount of physical silver in a short time without causing the price to spike before the Silver ETF starts trading:

THE MYSTERY OF THE SILVER ETF

(I don't think however that Buffet would sell all of his stash though, because it still seems a good investment)

By the way, I don't see the logic why the silver ETF needs to buy 130 million ounces of silver before it starts trading. Why not allow them to buy as they go, when needed, and start with much less reserves?

[kochevnik]

$this->bbcode_second_pass_quote('tugboat', 'Q')uestion - I have $50,000 US$ I want to invest but might not be able to access it for 6 months. I'm not interested in making a killing (that would be fine though!) but do not want to loose my shirt either. I'm leaning towards gold/silver with a storage option since I won't be in a position to take physical possesion. Any suggestions would be much appreciated.

[MrBill]

They say, never marry your position, or so I always believed, but to be honest, I think I am falling for OTM options in a big way? Those mail order $66 June calls I bought when we were down at $62 are starting to look very attractive now and it has been such a low stress relationship. No hassles. It might not be right for everyone, certainly not the volatility of living with a long unleaded position, which can be firey, but rewarding, at the best of times. However, if you're looking for commitment without having to watch your step every minute it is not a bad way to go. After you say, I do, just stick them in the cupboard and check-up on them every once in a while. The best part is when you get tired of them, you can sell them to the next guy at a profit and move onto the next one. It will probably all end in tears, I am sure, but until then, I am enjoying the honeymoon.

If you had the stomach or partial amnesia this week, your hourly 13 & 21 moving averages would have gotten you long Brent down around $6080 on FEB 28th and kept you in the game up to $6460 today. Not bad for a couple of days work. Of course, unleaded up a dime doesn't hurt.

I see that Sunoco and AGIP (USA) are pricing a deal off the new RBOB future now? I think that is the first physical trade based on the new gasoline benchmark and may mark the beginning of the exodus out of the HU contract. I wonder if we will look back with fond rememberance of the days when every young man dreamed of taking home a tanker full of methyl tertiary butyl ether oxygenate? "Of course, Ethanol is hot now, but her parents were just corn husks."

[MrBill]

Crude seems to have lost some of its upward momentum, but has yet to break down through any support areas, and is still well supported by the products, especially in the Brent by gasoil. May be just taking a breather. I doubt if too many will dare to go home short this weekend?

$this->bbcode_second_pass_quote('', 'L')ONDON (MarketWatch) -- Crude-oil futures on Friday added to the prior session's gains after the European Union and Iran concluded talks over the Persian country's nuclear-research program without reaching an agreement.

Front-month crude-oil futures rose 30 cents at $63.66 a barrel.
E.U. powers and OPEC oil-cartel member Iran failed to strike a deal on Tehran's nuclear program before a U.N. meeting that could open the way to punitive action.

The E.U. and the United States are concerned that Iran's nuclear program is not purely for peaceful purposes, as Iranian officials have proclaimed.
The International Atomic Energy Agency, an arm of the United Nations, meets on Monday to discuss Iran.

Crude futures sometimes rise on Friday, since traders don't want to be short the contract heading into the weekend, as potential for violence and political turbulence exists in various oil producers such as Nigeria, Iraq and Venezuela.

[MicroHydro]

$this->bbcode_second_pass_quote('MrBill', 'A')nd now for something completely different compliments of Dresdner Bank.
$this->bbcode_second_pass_quote('', 'P')alladium: Sister metal palladium outperformed yesterday, posting a closeon- close gain of 2.10% against small losses in the other metals. Perhaps optimism over the forthcoming end of Stillwater’s sales helped sentiment. If the positive view is further supported today by headlines in Malaysia over jewellers and carmakers turning to palladium from platinum, the white metal could test further above 300 again.

[drew]

$this->bbcode_second_pass_quote('kochevnik', '')$this->bbcode_second_pass_quote('tugboat', 'Q')uestion - I have $50,000 US$ I want to invest but might not be able to access it for 6 months. I'm not interested in making a killing (that would be fine though!) but do not want to loose my shirt either. I'm leaning towards gold/silver with a storage option since I won't be in a position to take physical possesion. Any suggestions would be much appreciated.

[MrBill]

Here, something for all you metal bugs out there.
$this->bbcode_second_pass_quote('', 'G')old: A 3rd positive day as gold followed EUR and then silver higher. The yellow metal looks set to end the week back on the highs and perhaps 580 could be on the cards. Yesterday’s performance was outclassed by silver, as gold managed only +1.15% from the prior close, but ended on the highs in spot at 568.80 after opening in London in the morning at 563.50. The bulk of the activity came in the afternoon following EUR rate hike and the sudden silver spike through 10.

Silver: Creeping higher earlier in the day as strikes and ETF dominated sentiment, silver broke sharply higher at the end of the trading day after hitting stops above 9.90 recent highs. Short term volatilities are already responding to the move with 1mth reaching 39% as spot breaks through 10 for the first time in 23 years. Expect 9.90 to provide first support in a correction, but the upside remains the most likely path in the short term given positive momentum as 10.20 traded yesterday and 10.27 this morning.

Platinum: Hardly moving yesterday as silver and palladium forged ahead,
platinum remained capped by 1,050 and traded again a narrow range.
Overnight, JPY retraced following the initial strengthening after stronger CPI data, and follow through buying brought platinum $10 higher to 1,060. If silver and palladium continue to perform strongly, platinum could see further follow through buying towards the highs at 1,075.

Palladium: The strongest performer yesterday after silver, palladium
registered a 3.15% gain close on close. The metal moved from 2902 to 296 as silver led the way higher, and closed on the highs yesterday. Again, better sentiment for palladium over the past couple of days and potential for follow through buying could be likely to support the metal and encourage a break back above 300 for the irst time since early February’s really to 320.

[tugboat]

Thanks for the tips everyone ! Now I need to do some work and quit thinking about it. I was looking into [www.goldmoney.com] also - but I like the idea of having the actual metals on this continent. The idea of commodity/currency trading seems alot more interesting than just holding but not something for the novice. Maybe after alot more studying ?

[MrBill]

$this->bbcode_second_pass_quote('', ''')You can almost smell the supply disruption premium brewing.'
Jason Schenker, Wachovia Corp.

[cube]

$this->bbcode_second_pass_quote('MrBill', '.')...

OPEC's Basket is Full of What Ifs?

[kochevnik]

$this->bbcode_second_pass_quote('tugboat', 'T')hanks for the tips everyone ! Now I need to do some work and quit thinking about it. I was looking into [www.goldmoney.com] also - but I like the idea of having the actual metals on this continent. The idea of commodity/currency trading seems alot more interesting than just holding but not something for the novice. Maybe after alot more studying ?

[MrBill]

So just watching Euronews here. It seems that last minute talks between the EU3 and Iran failed to bring any progress, so they will be referred to the UN Security Council on March 6th as planned. China urged Iran again this weekend to work with the IAEA and Russia to solve this impasse. Niether China nor Russia as members of the Security Council favor sanctions in any case. Therefore, simply more uncertainty surrounding the whole issue. I do not expect any resolution post-March 6th. Just moving the goal posts back. More threats this weekend from al Qaeda referring to Hamas and peace with Israel, plus London, Madrid and New York and calling on Muslims to keep up these attacks, as well as calling on Muslim boycotts of those countries where cartoons of Prophet Mohammed were published. Pretty sure the market will not like these events and it will get priced in when trading opens tonight. Cheers. Bill.

[MicroHydro]

$this->bbcode_second_pass_quote('MrBill', 'P')retty sure the market will not like these events and will get priced in when trading opens tonight. Cheers. Bill.

[MrBill]

Good morning,

the model cut quite a bit of length from last week's rally starting on February 28th. With positive comments coming out of Iran over delaying its nuclear enrichment activities and comments that OPEC is unlikely to cut production on March 8th, we may just start the week out a little softer this week, given we ended in overbought territory going into the weekend due to uncertainty. Unleaded still shows full long, as natural gas still indicates further weakness to come. The rest of the models are long on the daily and weekly moving averages, with tops in place, and showing signs of a correction on the hourly and short-term speculative positions, with tight stops should we see renewed buying at this point.

Saudi Arabia and Kuwait do not favor any cuts at this time despite acknowledging that markets will likely be over supplied in Q2'06 by some 2 mbpd of crude.

However, China also announced today that they would start to fill their strategic reserves by the end of 2006. It is not clear whether they intend to use their foreign reserves to buy foreign crude, thereby optomizing their foreign reserves as announced as well today, or whether as before they plan to fill reserves through their own domestic production? In a related headline, China's Hainan Island announced plans to build commercial oil storage facitilites which would have the ability to supply China, Japan and S. Korea and would be jointly owned between state and private investors. This would indicate that they plan to fill these reserves with crude out of the ME thereby providing one more supportive factor in the long term supply and demand equation.

Also on the bullish side were further comments out of the Niger Delta this weekend that militants there hope to shut down 1 mbpd of production. Currently, 455K bpd have been shut in for the past two weeks with no end in sight to the violence that has plagued this oil producing region. However, Iran's Ali Larijani has publicly announced that Iran has no intention of using oil as a weapon and that stopping crude exports over the nuclear dispute were not in the consumers of producers best interest. Iran does not support OPEC cuts at the moment, but feels that closer adherance to production quotas would in any case remove 1 mbpd of production from the market.

Certainly comments from John Bolton that said Iran faced tangilbe and painful consequences if it continued its nuclear activities do not help the EU3, Russia or China to calm Iranians down and only inflame an already intense situation. Such comments would be better reserved until after the IAEA makes its case to the UN and not before all diplomatic efforts fail.

A car bomb in Iraq's Baquba kills six, wounds 20 this morning. No relief on that front. So once again we have the dynamic of an oversupplied physical market against the background of continued uncertainty of supply given geopolitical events. Think at this point we can realistically expect to see consolidation under last Friday's highs and the lows from early last week. We will have to wait for events to take us out of the $61.85 - $64.60 range in the Brent and $61.80 - 63.92 range in the WTI, although I am looking for that negative spread between Brent and WTI in the April futures month to come back into line as we near maturity?

Clearly, the market is looking for any bad news as an excuse to buy. So the odds are a little loaded to the topside if anything.

[MrBill]

The price of crude did correct downwards from the $6400 area to the $6200 area. Looks like it is finding some support down here and may tick higher today? The products, especially gasoline gave up some ground yesterday. Unleaded is down a dime. The negative spread between WTI and Brent has closed in the April contract. That was easy money to be had when it was almost one dollar negative. Now that the spread is at even, expect it to move to the right. The May contract is +1.00, which seems more reasonable.

China's Foreign Minister says, Iran must fulfill its obligations under NPT and urges Iran to fully cooperate with the IAEA, but still sees room for a peaceful resolution of the Iran standoff. As mentioned yesterday, some movement from both sides has been seen, so as long as Russia, China and the EU3 keep putting gentle pressure on Iran to do the right thing, then Iran can have access to nuclear technology for legitimate purposes. The US should use this as a good excuse to standback and let diplomacy work. Their war of the words approach is not making any friends on any fronts.

Shell says tey would like to invest $500 million in China in 2006 bringing their total investment there up to $4.0 billion. Exxon and Chevron will meet Wall Street analysts this week. Markets will be particularly focussed on any changes to capex investment plans and any downward revision to reserve replenishment estimates.

Goldman Sachs has released new research touting strong commodity prices based on the high costs of production. Not good for Asian manufacturers who are seeing their profit margins for finished goods disappear. But I am sure good for you gold bugs, or is that palladium panderers?

$this->bbcode_second_pass_quote('', ' ')Recent volatility reflects inventory builds following weak demand late in 2005

We expect demand to recover in 2006, while supply growth will likely continue to disappoint.

Higher operational and capital costs support higher long-dated prices
Analysis of increased cost pressures for the marginal projects that will be needed to satisfy demand in coming years suggests that current long-dated prices are well supported, and may have further upside potential.

[MrBill]

Crude is up from $6200/10 to $6275/80, and it is a high risk sell at these levels, with a tight stop above the daily highs, as support for unleaded and gasoil is waning. I am playing the the correction to the correction. There is a fifty percent chance I am right.

Tomorrow is a Russian holiday. Lady's Day. So best wishes to all my Russian colleagues.

Tomorrow's inventory numbers are forecast by Reuters

Crude f/c +1.5 mio bbls
Distillates f/c -1.7 mio bbls
Gasoline f/c -0.6 mio bbls
Refinery runs f/c -0.1% to 85.2%
and Thurday's
Nat Gas f/c -74 -140 bcf
-105 bcf average vs. -134 bcf last year

[MrBill]

Quite as predicted. Once you go electronic you never go back.
$this->bbcode_second_pass_quote('', ' ') LONDON, March 7 (Reuters) - The New York Mercantile Exchange is expected to soon abandon floor trading in energy futures in London and shift over to electronic trade, the Financial Times reported on Tuesday.
"Brent will go electronic," Andy Gooch, chief executive of NYMEX Europe, told the paper.
NYMEX introduced the open outcry Brent contract in November 2004 to capitalise on discontent over the decision by IntercontinentalExchange (ICE) to close its London floor trading pit in favour of all-electronic trade.
After initial interest, the volume of NYMEX Brent trade has thinned to a trickle and the London trading community has embraced electronic trade.
But NYMEX, the world's biggest energy futures exchange, has no plans to quit the European market and is looking to establish a market in Russian Urals crude and other energy products to take on its London rival ICE futures, formerly the International Petroleum Exchange, the paper said.
NYMEX officials could not immediately be reached for comment.