News labeled commodities:

The broad contours of SEB’s economists’ expectations for the Norwegian economy remain intact. Growth in overall GDP should accelerate to 2.1 per cent in 2012 helped by a very strong investment cycle in the oil sector. However, relative to their outlook in November last year, they have sliced their forecast for growth in mainland GDP – excluding oil/gas and shipping – to 2.4 per cent in 2012, marginally slower than in 2011, but leave the 2013 forecast at 2.9 per cent.

SEB’s economists maintain their relatively positive view on Russia in the near term as long as the oil price stays at roughly the level as it is today. They forecast GDP to grow by 3.6 per cent in 2012 and 4.1 per cent in 2013, a minor downward revision for both years compared to the forecast made in November 2011.

In a new issue of Commodities Monthly, SEB’s experts say commodities prices are likely to struggle during the first half of 2012 with leading indicators still forecasting relatively low economic activity over the next six months. However, accelerating US growth, long term ECB refinancing operations and monetary easing in China are supportive factors. Global commodity destocking continued in December, opening up the possibility of restocking at a later stage.

SEB’s experts see commodities markets off to a shaky start 2012, but the situation should gradually improve over the course of the year assuming no major negative event such as a hard landing in China or a euro zone break-up. In the latest issue of Commodities Monthly, SEB’s experts says there’s little further downside risks for energy and metals prices due to marginal costs and supply optimization efforts in producer countries.

Corporate bonds issued by solid companies are emerging as the safer choice for investors in today’s turbulent market. “In some cases it is better to own corporate bonds issued by companies with stable sales than government bonds issued by countries with weak tax bases and rising expenditures,” SEB’s analysts state in the December Investment Outlook. Hans Peterson, global head of Investment Strategy within SEB’s Private Banking business, discusses investment options in this short video (4:25).

Crude oil is back on the radar with prices forecast to rise more than previously expected, but in general commodities will be flat over the next six months in light of the current global turbulence.

Increasingly likely resolute action to contain the eurozone debt crisis will probably sustain the current commodity rebound. However, momentum may soon ease or reverse with even more lackluster OECD leading indicators signaling weak global growth in 2012. China's more than one year old monetary tightening cycle is now showing significant effect, stirring up some hard landing concerns.

In the latest issue of Commodities Monthly, SEB’s experts say that gold is likely to shine yet brighter as the eurozone debt situation continues to intensify and debt laden OECD governments are forced to launch monetary rather than fiscal stimulus in order to counter flagging growth. However, broad based commodity indices are going to struggle as leading indicators point to further weakening in global growth while individual commodity performance is going to be more divergent with commodities in tight supply fairing the best while others will remain in harms way.

Ongoing volatility in the commodities sector will provide attractive buying opportunities in coming months, SEB researchers forecast in the latest Commodities Monthly released today. Gold in particular remains strong.

While rising oil prices have not yet killed off the global economic recovery, SEB's commodities experts express a concern that they may do so. Sharply lower purchasing manager indices (PMIs) clearly signal a risk. Rising European and emerging market interest rates are causing money portfolios to diversify away from the dollar, which is expected to depreciate in the second quarter, thereby supporting commodity prices. With hedge funds more exposed to commodities than at their 2008 high, SEB also anticipates increasing volatility, divergence and profit taking.

In the latest Commodities Monthly, SEB’s experts led by Bjarne Schieldrop say commodity prices are now at red hot levels, but could be propelled even higher by the current strong OECD recovery. Many commodity prices are stretched way above long term marginal costs, and they thus expect increasing volatility ahead. Higher commodity prices are increasingly putting the global recovery at risk with a potential contraction down the road.

SEB’s experts take a neutral to slightly bearish stand in the crude oil market for Wednesday. They see no reason to believe that the MENA situation should improve, even though yesterday's substantial move higher is likely to open up for a correction lower unless we see further escalations. Especially considering yesterday's wave of bearish economic sentiment.

Supply concerns for Libya now are lower but the main concern has all the time been a fear of wider supply disruptions across the MENA region further down the road. SEB's chief commodities analyst Bjarne Schieldrop sees a continued spreading of uprisings as more likely than not. In total SEB favour a long position for the day ahead.

SEB's chief commodities analyst Bjarne Schieldrop believes that the risk in the oil price continues to be skewed to the upside and hold a bullish view for the day ahead. This comes after the oil market held a steadier tone on Friday, calmed by Saudi Arabia's pledge to increase oil production.

Brent crude oil rallied to the intraday high of close to 120 dollars per barrel on Thursday in the morning as the main part of the Libyan oil production (about 1.0 mb/d out of 1.6 mb/d) appeared to have ground to a halt and a potentially extended state of civil war appeared more likely than a quick resolution to the conflict. This was probably about as high as Libya alone can push oil prices, says SEB's experts in Friday's crude oil comment.

The commodity sector in general is set for steady growth throughout 2011, led in part by high demand in emerging markets and strong liquidity in OECD countries. Development of the four commodity sub-sectors could be vastly different, however, if wild weather continues to impact agriculture and energy markets.

Energy, industrial metals and precious metals are all likely to remain stable or improve for the rest of the year, but the agricultural sector is not likely to follow suit, according to SEB's Commodities Monthly report.

In its latest report SEB's experts led by Bjarne Shieldrop, head of commodities research, forecast that commodities will head higher in the fourth quarter of 2010 and the first quarter of 2011 as the slow recovery remains intact. Inflation hedge demand for commodities is likely to act supportive going forward as US politicians look determined to deflate the dollar. Commodity prices are thus supported both by solid emerging market growth and by further liquidity from governments around the world competing to devalue their currencies.

Despite a historically high gold price there’s more to come and with the oil price hovering around 70 dollars per barrel a buying opportunity could well have opened up. Here you can hear SEB’s head of Commodities Research, Bjarne Schieldrop, share his views on the near-term prospects for commodities investments. 

SEB’s experts expect a commodity market rebound in the coming three months after the latest sell-off. In the latest issue of Commodities Monthly they however warn the rebound should be weaker than the market recovery in February.

In the May issue of Commodities Monthly SEB's experts say industrial metals prices look set to ease going into the second half of the year as Chinese construction activity slows down. Hear Bjarne Schieldrop, head of Commodities Research at SEB, talk about this and more in the filmclip below. Click the headline to access the full report.

SEB is the only bank in Estonia that offers companies the opportunity to trade in electricity at the world’s largest power exchange – Nord Pool.

Euphoria over the Greek rescue package is starting to fade. It's becoming increasingly clear that it's a short-term fix rather than a long-run solution. Thus, worried investors are likely to head out of euro and into gold, pushing the gold price back up again.

SEB's head of commodities research Bjarne Schieldrop shares his latest thoughts about trends for crude oil, Chinas impact on the commodities market, and why the demand for gold continues to increase.

SEB’s commodities business area is now ready for business. That is the message coming from Mikael Nordström, head of the new unit. “We are just at the outset of our journey to become the leading commodities bank in the Nordics,” he says.