Etikett: crude oil ETPs

Precious metal ETP flows strengthen as trade tensions continue

Precious metal ETP flows strengthen as trade tensions continue ETF SecuritiesPrecious metal ETP flows strengthen as trade tensions continue

ETF Securities Weekly Flows Analysis – Precious metal ETP flows strengthen as trade tensions continue

Highlights

  • Bargain hunters continued to drive strong inflows into gold ETPs – worth US$16.1mn – supported by ongoing trade tensions and geopolitical risks.
  • Crude oil ETPs faced redemptions worth US$32.7mn, the highest level in five weeks, on the back of profit taking as oil prices rose for the second week in a row.
  • Outflows from nickel ETPs widened the most in 3 weeks as prices rose over concerns of further US sanctions on Russia.

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Bargain hunters drove US$16.1mn of inflows in gold ETPs, marking two consecutive weeks of inflows. Gold prices came under pressure as bond yields rose sharply. The yield on the 10-year Treasury, rose to 2.96% the highest it’s been since January 2014 following supportive comments by the Fed governor Lael Brainard, for continued gradual increases in the Federal Funds rate. Added to that, the Federal Reserve Beige book showed a solid outlook for the US economy, while noting concerns over a potential trade war. Silver ETPs received US$12.8mn, marking the fifth consecutive week of inflows. Silver prices were lifted higher by industrial metals strong performance last week and managed to outperform gold by a strong margin of 3.5%. The gold/silver ratio for a time reached 78, its lowest level since early January.

Crude oil ETPs faced redemptions worth US$32.7mn, the highest level in five weeks, on the back of profit taking. Brent crude oil price reached US$74 per barrel last week, a level last seen in November 2014. The price appreciation has been supported by a trifecta of reasons – the decline of US crude oil inventory by 1mn barrels reported by the American Petroleum Institute (API), OPEC’s commitment to production cuts and ongoing geopolitical tensions. According to the Joint Technical Committee (JTC) of those OPEC and non-OPEC countries participating in the cuts, the oversupply in the oil market is nearly over. OECD stocks are likely to dip below the five year average over the coming quarter. Prices eased a little on Friday as President Trump accused OPEC of driving up oil prices artificially. This accusation comes at a critical time for Saudi Arabia. The country needs a high oil price ahead of an IPO of its state oil company, Saudi Aramco which is seen as an important step to spearhead the restructuring of its economy.

Industrial metal basket ETPs received inflows worth US$3.9mn, in stark contrast to outflows from copper, nickel and aluminium ETPs of US$4.6mn, US$14.1mn and US$5.3mn respectively. Outflows from nickel ETPs widened the most by US$14.1mn over the last three weeks on the back of profit taking. Nickel prices rose 7.5% on Thursday marking their highest daily increase in 6½ years and putting prices at their highest level since December 2014 owing to concerns of further sanctions being imposed by the US on Russia.

European equity ETPs faced outflows worth US$5.7mn extending the prior week’s trend of outflows as investors took profits ahead of the European Central Bank meeting this Thursday. Given the raft of mixed macro-economic data in Europe, investors will be looking out for further guidance on its asset purchase program.

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This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

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This communication may contain independent market commentary prepared by ETFS UK based on publicly available information.

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Robotic ETFs continue to see inflows

Robotic ETFs continue to see inflows

ETF Securities – Robotic ETFs continue to see inflows

Highlights

  • US$15mn into robotic themed equity ETFs.
  • Industrial metals – buying on price dips.
  • Arabica coffee ETPs attract US$6.8mn – the highest since October 2017 – as investors bargain-hunt.
  • Crude oil ETPs resume outflows.

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US$15mn into robotic themed equity ETFs. Last week’s flows marked a 3 week high. Investors are increasingly enthusiastic about the role of robotics in the modern world and have identified an investment opportunity in the companies that enable the deployment of this technology.

Industrial metals – buying on price dips. Broad industrial metal ETPs received a second consecutive week of inflows (US$5.0mn) as investors bought on price dips. Long copper ETPs received US$8.7mn of inflows. These inflows were at a 4-week high. The International Copper Study Group’s latest set of data released last week showed that world mine production declined by 2.4% in the first eleven months of 2017, while world refined production is estimated to have slightly increased by 0.5% in the first eleven months of 2017. The International Copper Study Group expect another year of supply deficits in 2018 as supply remains tight while demand increases. Copper’s role in electrification of vehicles (upgrading of electrical networks and increased use of wiring in cars) presents a strong structural tailwind for the metal. Nickel ETPs continued to see inflows (US$34.3mn). Nickel also benefits from the electrification of vehicles (see Commodity Research: Nickel – electrification may boost demand)

Arabica coffee ETPs attract US$6.8mn – the highest since October 2017 – as investors bargain-hunt. With a cooler Southern Hemisphere summer, the prospects for heat damage to this year’s coffee crop is reduced. Coffee yields are likely to rise and stocks are likely to be replenished after withdrawals last year. However, should weather conditions turn or crops disease increase, this narrative will no longer apply and prices could rise. Investors appear to be trying to find bargains.

Crude oil ETPs resume outflows. While in the prior week we saw the first inflows since July 2017, outflows resumed last week (a modest US$2.9mn out of long oil ETPs). As prices bounced 3.9%, investors took profit. Rig counts in the US have been rising for five consecutive weeks, highlighting the extent to which US supply will keep rising if prices remain this high.

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This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

 

Commodity outflows surge as US dollar rebounds

Commodity outflows surge as US dollar rebounds

ETF Securities – Commodity outflows surge as US dollar rebounds

Highlights

  • Inflows into nickel ETPs rise for the 3rd consecutive week, attaining their highest level since inception.
  • Gold ETP outflows rise to their highest level since September 2017 on the back of a strong jobs report.
  • Outflows from diversified basket ETPs climb to their highest level in 16 weeks, reversing 5 weeks of inflows.
  • Commodity outflows surge as US dollar rebounds

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Inflows into nickel ETPs rise for the 3rd consecutive week, surging to their highest level since inception, totalling US$71mn. The weaker US dollar coupled with a robust stainless steel market have helped drive nickel prices up 9% so far this year (as of 2 Feb 2018). Added to that, higher cobalt prices are triggering the substitution of cobalt with nickel in lithium-ion batteries, thereby raising expectations of future demand for nickel from battery led technology. The International Nickel Study Group (INSG) expects China to drive further demand growth in 2018. While Indonesian nickel ore production has driven global output to record levels, global inventories have been falling. Nevertheless, nickel’s deficit is expected to be smaller in 2018 vs 2017 according to INSG.

Gold ETP outflows worth US$251mn rose to their highest level since September 2017. Despite the selloff in global equity markets last week, gold prices came under significant pressure after the US dollar rallied on the back of a strong US jobs report. US nonfarm payrolls jumped by 200,000 last month and average hourly wages climbed 2.9% year-on-year (the highest since May 2009). The acceleration in wage growth had long been awaited by market participants and drove speculation that the Federal Reserve would lift US interest rates more aggressively than previously expected. Gold, which offers no yield, remains vulnerable into a rising rate environment.

Crude oil ETPs experienced the 24th consecutive week of outflows, totalling US$22.3mn last week. US oil production is set to increase in the coming months partly owing to productivity gains and as drilling activity picks up. The Energy Information Administration (EIA) expects production in the US to rise by just shy of 1 million barrels per day this year, which should cover more than half of the increase in global oil demand estimated by the EIA. We expect to see crude oil prices correct owing to rising growth in US oil production and an increase in stocks in the first quarter.

Outflows from diversified basket ETPs amounting to US$21.6mn surged to their highest level in 6 weeks, reversing 5 weeks of inflows. The commodity complex, led by energy and precious metals, suffered widespread losses last week as the greenback reversed its downward trend.´

Important Information

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This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

 

Gold inflows continue to buoyant

Gold inflows continue to buoyant

ETF Securities – Gold inflows continue to buoyant

Highlights

  • Agricultural basket ETPs receive the largest inflows on the platform, totalling US$46.4mn.
  • Crude oil ETPs experienced the 23rd consecutive week of outflows.
  • Copper price lags the industrial metal sector but receives biggest inflows.

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Agricultural basket ETPs receive the largest inflows on the platform, totalling US$46.4mn. With the exception of cotton, all agricultural commodities have posted price declines over the past year. According to the USDA January World Agricultural Supply and Demand (WASDE) report, updates show most agricultural commodities to be in a surplus. Although net positioning in the futures market for most agricultural commodities has improved over the past month, the majority have been net short over the same period, if not longer. The bearish sentiment on those agricultural commodities is in contrast to the ETP space but could continue because of ample supply expected in those markets.

Gold was the only precious metal that received inflows. The continued weakness in the US dollar amid a government shutdown in the US has helped the gold price attain a 4 ½-month high. So far, the parties in the US Congress have agreed to an initial deferment until 8 February, leaving them with enough funds to operate for the next 2 weeks. However, this raises further uncertainty and is likely to support further upside for gold prices. Furthermore, rumours that China may curb its purchases of US Treasuries has lent a hand in gold’s upside. The fact that US treasury yields continue to rise and the trade weighted dollar index has fallen to a 3-year low suggest that market participants have not yet discounted the rumours.

Crude oil ETPs experienced the 23rd consecutive week of outflows, totalling US$79.8mn last week. Oil prices have received a tail-wind from falling crude oil inventories in the US, increased geopolitical tensions (in particular in Iran) and strong compliance by OPEC countries with their deal to curb production. However, looking beyond the headlines we see that gasoline inventories have risen (indicating that inventories have simply shifted from crude to product). Geopolitical issues tend to wax and wane and so we doubt that the geopolitical premium will be persistent. US production of oil is likely to rise to an all-time high in 2018, another factor that presents a downside risk for crude.

Copper price lags the industrial metal sector but receives biggest inflows. Copper ETPs received US$24.5mn last week, with investors buoyant on the industrial metals sector after the IMF has upgraded its growth forecast for China in 2018 and 2019. Copper prices have been a relative laggard of the sector. Although Chinese growth was raised 0.1% to 6.6% in 2018 and 2019 by the IMF, copper stocks in the country rose, contributing to a global inventory rise of 0.6% in 2017, according to the International Copper Study Group.

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.

 

Gold inflows rebound towards the end of the year

Gold inflows rebound towards the end of the year

Highlights

  • Gold ETPs saw inflows of US$32mn for the final week in December.
  • Crude oil ETPs saw further outflows of US$28mn last week, we have seen 22 consecutive weeks of outflows highlighting pessimism amongst investors.
  • In Currency ETPs we saw US$10mn and US$11mn respectively for the US dollar and Euro short positions.

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The flows for the final week in December were understandably low for most commodities with the exception of gold and oil.

Gold ETPs saw inflows of US$32mn for the final week in December which we believe is a rebound following the December 14th US Federal Reserve interest rate hike coupled with the escalating worries in North Korea and Iran. The inflows follow a month of net outflows totalling US$106mn. For the full year gold ETPs saw inflows totalling US$513mn leaving total assets under management (AUM) at US$12.8bn. Looking across other precious metals all saw inflows totalling US$124mn for the full year, this was helped by inflows into silver and platinum representing 10% and 15% of AUM respectively. Palladium, was the only precious metal to see outflows, totalling US$166mn, likely due to profit taking after posting returns for the full year of 56%, well above Gold’s full year returns of 11%.

Crude oil ETPs saw further outflows of US$28mn last week, we have seen 22 consecutive weeks of outflows highlighting pessimism amongst investors over the rise in prices over the second half of 2017. The US pressure over extending sanctions in Iran, and the recent unrest there, have pushed up oil prices. Oil investors remain very sensitive to geopolitical unrest in Iran, the third largest producer in OPEC. We believe the impact has been exaggerated. With the US expanding supply and OPEC likely to under deliver on its promise to consistently curb production, we expect the supply to grow. At the same time demand is unlikely to continue to grow at the current pace, with prices having gained 33% over the past year. We expect the oil price to remain in a range from US$45 to US$60/bbl for 2018, although a more significant geopolitical upset in the Middle East could cause temporary price spikes.

In Currency ETPs we saw US$10mn and US$11mn respectively for the US dollar and Euro short positions during the month of December. Over the same period both the GBP and NOK saw inflows in to long positions of US$6.9mn and US$5.4mn respectively.

Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).
The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

ETFS UK is required by the FCA to clarify that it is not acting for you in any way in relation to the investment or investment activity to which this communication relates. In particular, ETFS UK will not provide any investment services to you and or advise you on the merits of, or make any recommendation to you in relation to, the terms of any transaction. No representative of ETFS UK is authorised to behave in any way which would lead you to believe otherwise. ETFS UK is not, therefore, responsible for providing you with the protections afforded to its clients and you should seek your own independent legal, investment and tax or other advice as you see fit.