• 1 day Shell Oil Trading Head Steps Down After 29 Years
  • 1 day Higher Oil Prices Reduce North American Oil Bankruptcies
  • 1 day Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 1 day $1.6 Billion Canadian-US Hydropower Project Approved
  • 1 day Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 2 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 2 days Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 3 days Africa’s Richest Woman Fired From Sonangol
  • 3 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 5 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 5 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 8 days The Oil Rig Drilling 10 Miles Under The Sea
  • 8 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

Goldman’s Commodity Unit Sees Worst Q1 In A Decade

Investment bank Goldman Sachs saw…

Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Seismic Activity in Japanese Commodity Markets

Seismic Activity in Japanese Commodity Markets

There has been some unusual action on the Japanese commodities markets that demands a comment.

I mentioned earlier this week that over the last two weeks the Japanese have revved up several new structured investment products tracking commodities.

There are now some "seismic signals" registering in those markets, showing these new ETFs and trusts may be having an immediate impact.

On Tuesday, open interest in rubber futures on the Tokyo Commodity Exchange suddenly jumped 12% (touching off a flurry of prophylactic jokes from some of my coarser Asian colleagues).

Rubber

This is a large jump. In fact, I can't remember the last time I saw a daily move of this magnitude on a major commodities exchange.

Most interestingly, the majority of the buying came from trade and broker members of the TOCOM. These professional buyers usually account for a very small portion of TOCOM buying. The bulk of purchases almost always comes from non-commercial customers.

Trade and broker members are generally sophisticated buyers. The kind who would be dealing in the structured products TOCOM recently introduced. The big jump in rubber could be a direct result of these new investment options.

And rubber wasn't a one-off. Yesterday, open interest in TOCOM gold futures jumped 8%. Again, a large portion of the buying came from trade members.

Gold

One surprise is that trading in TOCOM platinum and palladium futures has been relatively subdued, despite the launch of new PGM-backed ETFs last week.

But there's been action in other parts of the world. NYMEX palladium futures had a wild week. Last Friday, NYMEX open interest in palladium jumped 2.7%. On Monday, it fell back 2.6%. Only to jump 4.4% on Tuesday and then fall 5.5% yesterday. On near-record volumes.

Palladium

This is extreme volatility. And it may have to do with speculation that the new Japanese ETFs will increase global demand for platinum group metals.

Something is certainly afoot. Keep an eye on this one.
Here's to rubber, gold and palladium,

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment
  • Anonymous on February 27 2010 said:
    Very interesting piece. This is the way that I would like for my students to present information. But as for understanding the Japanese market,well... When I began teaching finance, I thought that I had all the answers about that country: I was one of the people who thought that the Japanese economy was going to show the world miracles (and I might have put that in the editions of my finance book that I taught from). Where certain things are concerned (e.g. nuclear), I still feel that way, but unfortunately it's impossible to be sure.
  • Anonymous on August 29 2010 said:
    First of all, we need some important background information about interest rates. Typically, short-term interest rates are lower than long-term interest rates (think of the rate on a 15-year mortgage vs a 30-year mortgage). This is because there is less risk to the lender in a short period of time than in a long period of time. A lot can happen to the borrower during those extra 15 years. That's twice as much time for the borrower to lose a job, become ill or have any number of other possible life events that make it difficult or even impossible to pay back the loan. Therefore, for two loans that are similar in every other way, the one that has the longer payback period will have the higher interest rate.Structured Investments

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News