Friday, April 1, 2011

Oil At $108

Oil at fresh 30-month high, pennies off $108
1 April 2011
, by Claudia Assis (MarketWatch)


Crude for May delivery, the most-active contract, advanced $1.22, or 1.1%, to $107.94 a barrel on the New York Mercantile Exchange.

That's the highest settlement for a most-active since Sept. 25, when oil futures settled at $108.02 a barrel.

Tyler Durden (Zero Hedge): “Even more obviously, it means that oil is going to $200 on short notice.”
1 February 2011
, by Tyler Durden (Zero Hedge)

Brent Over $103 As Copper Hits Record Over $10,000
3 February 2011
, by Tyler Durden (Zero Hedge)


As suggested last night, the escalation in Egypt, together with more riot news out of Yemen, and fear that tomorrow's Syrian "Days of Rage" will live up to their name, Brent Crude has pushed to the $103 psychological barrier (even as the Brent-WTI spread continue to be about $10, much as we speculated previously would be the case for a while).

And speaking of psychological barriers, copper just passed a key one after it moved to a record north of $10,000/tonne for the first time "as investors bet that supply shortages and buoyant demand growth this year would keep fuelling a rally."


And in an amusing turn of events, the price of gold and silver continues to flatline even as some very prominent investors continue to make bets that the yellow metal will rise by 50% in 12 months.

Peter Schiff - CNBC Fast Money 3-31-11

Turk - Record Silver Backwardation Spells Danger for US Dollar
1 April 2011
, by Eric King (King World News)


“We’re now at a record backwardation in silver in terms of length of time. I think what we need to do is compare what is happening now to 2009 when silver was in backwardation the last time.

Over a period of just about two months silver rose 40% from approximately $10 to $14, and that rise in price eliminated the backwardation.”

“But here is the really stunning thing this time Eric, we’ve gone from $27 to over $37, again about a 40% rise in price and the backwardation is still there.

It hasn’t disappeared. So what that suggests to me is that there is tremendous physical demand for silver. This is a very, very rare event and it’s very bullish.

Silver Set For All Time Record Quarterly Close - Gold To Silver Ratio On Way To 17 To 1 As Per 1980?
31 March 2011
, by Bloomberg and GoldCore (Zero Hedge)


I want to buy more gold,” said Faber in an interview in Mexico City today.

“Each time that I see Mr. Bernanke, and each time Mr. Tim Geithner opens his mouth, I feel like buying more gold and silver


Gold and silver have consolidated on yesterday’s gains as inflation, geopolitical and eurozone debt concerns support.

Silver has risen above its 31 year record closing price of yesterday and looks set to target new record nominal intraday highs above $38.16/oz.

Third Largest Producer Of Silver Says Production Is Now "Totally Paralyzed" Following Week-Long Strike
30 March 2011
, by Tyler Durden (Zero Hedge)

In news that should move the precious metals market, we learn that the world's third largest producer of silver (as well as zinc and lead) has announced its production is now totally paralyzed.

From Reuters:

"A week-old strike at Bolivia's San Cristobal mine has totally paralyzed production and exports of silver, zinc and lead, a union leader said on Wednesday.

San Cristobal is the world's third-largest producer of silver and the sixth-largest producer of zinc, according to Japan's Sumitomo Corp, which owns the mine

For those who recall basic central planning economics this means that silver should plunge immediately, and should react even more adversely on news that crude supplies in the US are surging.

After all, oil supply demand is far more critical to silver price discovery than the actual supply of a metal that unlike gold, is used in various industrial and peacebringing applications (see Operation Odyssey Dawn).

Jim Willie: Buy Silver IF YOU CAN GET IT – price not important since silver price will explode later.

March 23rd, 2011. Jim Willie Archived Audio

“Nice Work If You Can Get It”

Silver Stocks Surge on Record Silver Price
24 March 2011
, (GoldAlert)


Silver stocks have soared in recent weeks as the price of silver has climbed to a series of multi-decade highs. Early Thursday morning, silver traded up to $38.16 per ounce – a level not seen since the Hunt Brothers attempted to corner the silver market 31 years ago.

The weak U.S. dollar has helped to bolster investment demand for silver and silver stocks. There has been tremendous growth in exchange-traded funds tied to the silver price as investors seek leverage to the precious metals. This demand has taken supply off the market and helped drive up silver as well as companies and produce and explore for the precious metal.

Silver Wheaton (SLW), the largest silver royalty company in the world, has rallied 15% thus far in 2011 and 194% over the past 52 weeks. The company announced updated silver reserve and resources this morning, reporting that they now control 1.3 billion ounces of silver. The bulk of the silver stocks have not been able to match the performance of Silver Wheaton, but some companies have seen strong advances in their share prices in recent weeks. One widely-held silver stock, Silver Standard Resources (SSRI) has gained 10.2% in the month of March alone.

The commodity team at Merrill Lynch highlighted the fact that “U.S. silver coin sales have hit seasonal record highs almost every single month of late.” For investors seeking more leverage to the silver price than that offered by silver bullion, many have turned to silver stocks.

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