Senior Market Analyst, Commodities and Energy
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Apr 15, 2013

Commodities as hedge funds not an asset class: Kemp

LONDON, April 15 (Reuters) – The status of commodities as a
distinct asset class is under threat following another lousy
start to the year for investors.

Total returns on the two major commodity indices, the
Standard and Poor’s Goldman Sachs Commodity Index
and the Dow Jones-UBS Commodity Index, show losses of
4.4 percent and 3.7 percent respectively so far this year, while
an investment in the S&P 500 equity index is up 12
percent, including dividends.

Apr 12, 2013

Falling oil prices to test Saudi policy: Kemp

LONDON, April 12 (Reuters) – Saudi officials should welcome
the recent decline in oil prices, which takes benchmark Brent
close to the level of $100 per barrel that everyone from the
kingdom’s oil minister down has said is “reasonable” for both
consumers and producers.

For more than a year, Saudi officials have sought to anchor
market expectations by reiterating the $100 figure, though the
kingdom has often appeared more comfortable with prices around
$110, and adjusted production and exports accordingly.

Apr 12, 2013

Market watches for resumed U.S. gas drilling: Kemp

LONDON, April 12 (Reuters) – The recent rise in U.S. natural
gas prices, if sustained, will provide an opportunity to
identify the threshold that drillers need to cover their
marginal costs, the closest thing to conducting a controlled
experiment possible in real-time markets.

Concerns about peaking oil and gas production are over, but
the question about peak prices is still very much alive. The
shale revolution has ensured there will be sufficient oil and
gas but left unanswered the more important question about what
price will be needed to make sure they are available.

Apr 11, 2013

Shale drillers defy sceptics to win Red Queen’s Race:Kemp

LONDON, April 11 (Reuters) – Exponential growth in shale oil
production must slow because output from fractured wells
declines much more rapidly than conventional ones, and because
the most productive areas have been drilled first, according to
shale sceptics.

Shale production has been likened to Lewis Carroll’s Red
Queen Race, in which more and more new wells will need to be
drilled just to offset rapidly declining output from existing
holes, according to one analyst at The Oil Drum (“Is shale oil
production from Bakken headed for a run with the Red Queen?” Sep
25, 2012).

Apr 10, 2013

U.S. oil and gas royalties at high risk of misreporting: Kemp

LONDON, April 10 (Reuters) – Collection of royalty payments
from production of oil and gas on federal lands is one of the
government programmes most at risk from fraud, waste and
mismanagement, according to congressional investigators.

“The Department of Interior does not have reasonable
assurance that it is collecting its share of revenue from oil
and gas produced on federal lands, and continues to experience
problems in hiring, training and retaining sufficient staff to
provide oversight,” according to the Government Accountability
Office (GAO) in a report sent to Congress.

Apr 8, 2013

Protecting the power grid and GPS from solar storms: Kemp

LONDON, April 8 (Reuters) – Power networks, pipelines, radio
communications and the global positioning system (GPS) are all
entering a period of increased risk of outages from geomagnetic
storms as the solar activity cycle peaks in 2013.

So far the increase in solar activity has been smaller than
expected.

Nevertheless, there is no reason for complacency. Major
geomagnetic storms are more frequent during the periods of
maximum solar activity that occur every 11 years but can occur
at any time, sometimes with serious results. Grid operators
might have just 30 minutes notice of an incoming storm to take
emergency action. ()

Mar 28, 2013

CalPERS remains cool on commodities: Kemp

LONDON, March 28 (Reuters) – The California Public
Employees’ Retirement System (CalPERS) continued to cut its
exposure to commodity futures at the start of the year, even as
the largest public pension manager in the United States
increased its total inflation hedging sharply.

CalPERS pushed its allocation to inflation-linked assets to
almost $10 billion by the end of January, 3.9 percent of the
total fund, up from $7.6 billion, 3.0 percent, at the end of
December. It was easily the largest allocation to inflation
protection since the fund began reporting monthly numbers in
this format in November 2011.

Mar 27, 2013

Fundamentals and behaviour in commodity prices: Kemp

LONDON, March 27 (Reuters) – Fundamental changes in supply
and demand account for less than a third of short-term movements
in commodity futures prices, according to an authoritative new
study by researchers at UNCTAD and the Swiss Federal Institute
of Technology.

Reflexive trading, when prices respond to past price changes
rather than new information about fundamentals, now accounts for
60 to 70 percent of price moves in the main futures contracts,
up from less than 40 percent before 2005.

Mar 27, 2013

Column: Congress must legislate to avoid a helium crisis – Kemp

LONDON (Reuters) – Bipartisan bills introduced into the U.S. House of Representatives and Senate aim to avert the imminent shutdown of the Federal Helium Reserve, which provides a third of all the gas consumed worldwide, and develop a proper market to avoid a long-term crunch in supplies of one of the world’s most critical raw materials.

Helium is best known for filling party balloons and making people talk with a squeaky voice.

Mar 27, 2013
via The Great Debate

Congress must legislate to avoid a helium crisis

Bipartisan bills introduced into the U.S. House of Representatives and Senate aim to avert the imminent shutdown of the Federal Helium Reserve, which provides a third of all the gas consumed worldwide, and develop a proper market to avoid a long-term crunch in supplies of one of the world’s most obscure but vital raw materials.

Helium is best known for filling party balloons and making people talk funny. But its properties as the second-lightest element, chemically unreactive, and with a boiling point just 4 degrees above absolute zero, make it essential for a wide range of cutting edge scientific applications.

    • About John

      "John joined Reuters in 2008 as one of its first financial columnists, specialising in commodities and energy. While his main focus is on oil markets, he has written broadly on the emergence of commodities as an asset class, regulatory issues and macroeconomic themes. Before joining Reuters, John spent seven years as a senior analyst for Sempra Commodities (now part of JP Morgan) covering base metals and crude oil. Previously, he worked as an analyst on world trade, banking and financial regulation for consultancy Oxford Analytica."
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