Deutshce becomes one of the most bearish on the Street, cutting its gold price forecast to an average of $1,141 for the year, down 14.7% from the bank's previous estimate, and far below 2013's $1,413 average.
Last week, BAML also joined the rush of firms cutting their gold targets.
Deutsche also slashes its forecast for silver by 19% to $19 per ounce, and WTI crude to $88.75 per barrel, $10 below 2013.
"A third year of rampant U.S. oil supply growth propelled by tight/shale oil development, combined with the potential for the normalization of Iranian oil exports, is increasingly painting a picture of an oversupplied global oil balance, which poses meaningful downward pressure on oil prices."
Natural gas is held steady at $4.25 thanks to excess volume withdrawn from storage thus far this winter.
The six-month agreement by which Iran will scale back its nuclear program in return for $6-7B worth of sanctions relief will start being implemented on January 20.
Shortly afterwards, Iran and the P5+1 world powers will begin talks over a final deal.
Plenty of stumbling blocks exist, including an Iranian parliamentary bill that calls for the country to enrich uranium up to 60%. In the U.S., there are proposals in Congress to stiffen the sanctions against the country, although President Obama has pledged to veto any such measures while negotiations are taking place.
News of the implementation of the deal follows a report that Iran is in talks with Russia for the latter country to receive 500,000 bpd of oil from Iran in return for equipment and other goods.
Iran is reportedly in talks with Russia for the latter country to receive 500,000 bpd of oil from Iran in return for equipment and other goods.
The deal, worth a possible $1.5B, would increase Iran's crude exports by 50%.
Given that Russia produces its own oil, the Iranian crude may well be sold onto other buyers.
It's not clear whether the transaction would go into effect before or after the finalization of an agreement between Iran and six world powers - including Russia - that would ease the sanctions on the Persian nation in return for the scaling back of its nuclear program.
South Sudan's government has finally begun delayed talks with rebel negotiators in an attempt to end over three weeks of fighting that has left more than 1,000 people dead and caused 200,000 to flee their homes.
Meanwhile, Sudan and South Sudan, which is the third-largest oil producer in sub-Saharan Africa, have spoken about forming a joint force to guard the latter's crude fields from rebels. The discussions follow fighting in two oil-rich states, Unity and Upper Nile. (Previous)
The severe cold weather sweeping across the U.S. threatens to curtail booming oil production as it disrupts traffic, strands wells and interrupts drilling and fracking operations.
Output in North Dakota typically slows in winter as producers scale back on drilling and well completion services, but analysts are bracing for a worse than usual impact on output from the state that could affect operations of companies such as Continental Resources (CLR), Marathon Oil (MRO) and Hess (HES).
U.S. crude oil prices haven't moved much yet, but the price differential for Bakken crude jumped last week and bitter cold in northern Alberta has pushed Canadian heavy crude prices to five-month highs; demand for natural gas has surged to new records, which analysts say should keep prices over $4/mcf, at least for the short term.
Mildly supportive EIA inventory numbers aren't enough to pull oil out of a big slide begun just before the new year. Off 1% today to $94.50 per barrel, February WTI crude was over $100 on December 27. USO -1.3%.
Natural gas is steady as the EIA reports a 97 bcf draw on inventories. Total stocks of 2.974 tcf are off 562 bcp from a year ago, and 289 bcf below the 5-year average. UNG +0.3%.
Libya hopes it can restart production at one of its largest oil fields, Repsol-operated (REPYY, REPYF) El Sharara, in two to three days after protesters agreed to end their two-month stoppage of the facility.
The stoppage is one of several disruptions of Libya's oil supply caused by protesters, including workers and armed militia, which caused the country's output fell to below 250K bbl/day vs. 1.6M bbl/day in 2011 before Gadhafi's downfall.
The prospect of increased production in Libya is helping to push crude prices lower; WTI crude -2.5% to $95.95, and shares of most energy companies also are down.
South Sudan's government and rebels were due to start ceasefire talks in the Ethiopian capital of Addis Ababa today in an attempt to end over two weeks of ethnic bloodletting that has left more than 1,000 people dead and displaced at least 180,000.
The discussions will come after rebels regained the key city of Bor, the capital of Jonglei state, which has untapped oil reserves. The fighting has cut crude output in South Sudan, which has the third-largest reserves in sub-Saharan Africa.
The rebels are led by Vice President Riech Makar, who was sacked by President Salva Kiir in the summer. The latter is from the Dinkas group and Makar is from the Nuer, with some but not all of the dispute split along those ethnic lines.
Airline stocks dip in early trading after a government report shows U.S. crude oil supplies stayed in a downward trend. Violence in the South Sudan has also been a recent factor in oil prices.
Besides the prospect for higher prices for aviation fuel, the airline sector was ripe to blow off a little steam after rallying before and after the merger of American Airlines and U.S. Airways, note analysts.
Decliners: United Continental (UAL) -3.2%, Delta Air Lines (DAL) -2.6%, Spirit Airlines (SAVE) -2.4%, JetBlue (JBLU) -1.5%, American Airlines (AAL) -1.5%, Southwest Airlines (LUV) -1.3%.
Kenyan President Uhuru Kenyatta and Ethiopian Prime Minister Hailemariam Desalegn have arrived in Juba, the capital of South Sudan, for talks with the country's president in an attempt to bring an end to two weeks of fighting between government forces and those loyal to former Vice President Riek Machar.
The rebels have control of Bentiu, the capital of the of oil-rich Unity state, while battles have been reported in Malakal, the capital of Upper Nile state, another key oil region. South Sudan exports 220,000 bpd of crude, although the violence has led to a sharp drop in output.
The arrival of the regional leaders comes after the U.N. pledged to double its presence in South Sudan with 6,000 more soldiers and police amid fears that thousands have been killed by the fighting and amid a major refugee crisis.
OPEC doesn't need to reduce output in 2014 in order to offset potentially increased production from Iran, Libya and U.S. shale oil, Saudi Arabia, Kuwait and Iraq said yesterday.
The comments came after OPEC decided earlier this month to keep output at a maximum of 30M bpd until June at least.
Libyan supplies have fallen to 250,000 bpd from 1.4M bpd in March, due to rebels closing oil export ports for the past five months. The country is prepared to use force to reopen those ports, Oil Minister Abdulbari Al-Arusi said.
Mexico’s sweeping energy reform clears its final major hurdle, as San Luis Potosi becomes the 17th state legislature to give rapid-fire approval to constitutional changes that will allow foreign investment into what has been a 75-year-old state monopoly.
An influx of Mexican oil would contribute to a glut that is expected to lower the price of Brent crude, which has averaged $108.62/bbl YTD, to as low as $88/bbl in 2017; Exxon's recent prediction that North American production would vault ahead of every OPEC member except Saudi Arabia doesn’t even take into account any changes in Mexico.
Although the first Mexican opportunities may go to the major independent oil companies in the U.S. and Europe, Chinese groups such as Cnooc (CEO) and Sinopec (SNP) will actively seek opportunities; Mexico's president plans to visit Beijing in 2014 and his trip may reveal whether Chinese firms are acceptable partners.
Energy Secretary Ernest Moniz has indicated that he's in favor of revisiting the U.S.'s severe restrictions on crude oil exports, which stretch back to the OPEC oil embargo in the 1970s.
Moniz said his department would carry out a technical analysis of the issue.
The debate about easing the limits comes as U.S. production surges because of the shale boom.
Oil companies are naturally in favor, and argue that it would cause world oil prices to fall and bring relief to American consumers; opponents of relaxing the restrictions argue that it will lead to higher gasoline prices.
All of the PowerShares DB Crude Oil ETNs are based on a total return version of the Deutsche Bank Liquid Commodity Index-Oil (the "Index") which is designed to reflect the performance of certain crude oil futures contracts plus the returns from investing in 3 month United States Treasury bills. The Long ETN is based on the Optimum Yield™ version of the Index and the Short and Double Short ETNs are based on the standard version of the Index. The Optimum Yield™ version of the index attempts to minimize the negative effects of contango and maximize the positive effects of backwardation by applying flexible roll rules to pick a new futures contract when a contract expires. The standard version of the index, which does not attempt to minimize the negative effects of contango and maximize the positive effects of backwardation, uses static roll rules that dictate that an expiring futures contract must be replaced with a contract having a pre-defined expiration date.
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