Vitol warns crude could pass $150 - FT.com

Another record year for Vitol - in revenues, if not in profits...

The Geneva-based trading house, which is owned by 360 of its employees, said that revenues rose last year to a record $297bn, up 44 per cent from $206bn in 2010, on the back of rising volumes and prices. Commodities trading houses achieve tiny margins and industry executives believe that the difficult trading conditions of last year mean that Vitol earned between $1.5bn and $2.0bn in the year, below its record high of $2.3bn set in 2006.

Vitol said that its total trading volumes reached 457m tonnes, up roughly 14.5 per cent from 399m tonnes in 2010, as the trading house boosted some of its non-oil businesses, including emissions and coal. Vitol traded 135m tonnes of crude oil, equal to roughly 2.8m barrels a day, little changed from 134m tonnes in 2010.

Vitol warns crude could pass $150

The world’s largest independent energy trader has warned that oil prices could surge this year to a record high due to growing geopolitical tensions in the Middle East.

Ian Taylor, chief executive of Vitol, said on Tuesday as he released results for the commodities trading house that his main scenario envisaged oil prices remaining at “around current levels for the balance of 2012”, but he warned: “Geopolitical risk, especially in the Middle East, creates potential material risk to the upside.”

In a separate interview with the Financial Times, Mr Taylor said that oil prices could even surpass the record high of nearly $150 a barrel set in mid-2008. “It is unlikely, but it is possible,” he said when asked whether prices would surge to a fresh record.

Even if oil prices remain just at current levels, as Vitol is predicting, it would mean that 2012 would set a record annual average. Brent crude oil averaged $109 a barrel last year, setting an all-time high above the previous average record of $98.4 a barrel in 2008.

The comments came as the Switzerland-based trading house reported record revenues and volumes in 2011. Vitol, which is privately owned, does not disclose profitability.

...

“The supply side of the market is a mess,” Mr Taylor said. “Demand, even if not great, continues to grow. So its difficult to see much price downside from current levels.”

Moreover, oil inventories remain at historically low levels, particularly in Europe, due to the impact of the civil war in Libya on oil supplies. The International Energy Agency earlier this month said that crude oil inventories in Europe fell in December to a 15-year low.

...

The forecast by Vitol comes as oil executives, traders and policymakers gather for International Petroleum Week, the annual meeting of the industry this week in London. For the second year in a row, the risk of supply disruption is the dominant theme for IP Week. In 2011 Libya was the main worry. This year it is Iran.

...

The Geneva-based trading house, which is owned by 360 of its employees, said that revenues rose last year to a record $297bn, up 44 per cent from $206bn in 2010, on the back of rising volumes and prices. Commodities trading houses achieve tiny margins and industry executives believe that the difficult trading conditions of last year mean that Vitol earned between $1.5bn and $2.0bn in the year, below its record high of $2.3bn set in 2006.

Vitol said that its total trading volumes reached 457m tonnes, up roughly 14.5 per cent from 399m tonnes in 2010, as the trading house boosted some of its non-oil businesses, including emissions and coal. Vitol traded 135m tonnes of crude oil, equal to roughly 2.8m barrels a day, little changed from 134m tonnes in 2010.

read the whole story online here: Vitol warns crude could pass $150 - FT.com

Singapore to exempt gold, other precious metals from 7% tax - FAST NEWS | Mineweb

Everyone wants a piece of the coming gold mania...

Singapore to exempt gold, other precious metals from 7% tax

The move brings Singapore's tax treatment of investment-grade gold and other precious metals in line with the practices of countries such as Australia and Switzerland.

Posted: Friday , 17 Feb 2012

SINGAPORE (REUTERS) -

Singapore will exempt investment-grade gold and other precious metals from a seven percent goods and services tax to spur the development of gold trading, Finance Minister Tharman Shanmugaratnam said on Friday.

The change brings Singapore's tax treatment of investment-grade gold and other precious metals in line with the practices of other developed countries such as Australia and Switzerland, he said.

"We will facilitate the development of gold trading, which can draw on Singapore's strengths as a financial and trading hub, to meet strong demand for investment-grade gold in Asia," Tharman said in a budget speech.

"It should add greater incentive for asset managers, especially those in the alternative investments space, to seriously consider Singapore as a location for their operations," Tan Tay Lek, a tax partner at PwC Services LLP (Singapore), said in a statement.

(Reporting by Charmian Kok; Editing by Anshuman Daga)

© Thomson Reuters 2012 All rights reserved

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MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning, and concluding, 24 hours later, in the Vancouver evening. If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

Mineweb.com - The world's premier mining and mining investment website Singapore to exempt gold, other precious metals from 7% tax - FAST NEWS | Mineweb

China central bank in gold-buying push - FT.com

China central bank in gold-buying push

The World Gold Council believes China’s central bank made significant gold purchases in the final months of 2011, contributing to a surge in the country’s imports.

Marcus Grubb, managing director for investment at the WGC, a lobby group for the gold mining industry, told the Financial Times that buying by the People’s Bank of China could explain a large discrepancy between Chinese imports and the WGC’s estimates of consumer demand in the country.

“There is absolutely a discrepancy in the import figures,” said Marcus Grubb. “The obvious inference is that the central bank is buying.”

His comments mark the first public statement from a senior gold industry executive pointing to purchases by the Chinese central bank, a trend that many others have highlighted privately. The PBOC did not respond to questions on Thursday.

China’s imports from Hong Kong, which account for the majority of its overseas buying, soared to 227 tonnes in the last three months of 2011, according to data published by Hong Kong. Mine production in the country, the largest gold producer, stood at about 100 tonnes in the quarter, implying total supply of at least 330 tonnes.

That compares to demand of 191 tonnes for gold jewellery, bars and coins – which account for the vast majority of Chinese demand – reported by the WGC on Thursday.

Most industry executives believe China has been quietly accumulating gold produced in its domestic market for years, but it rarely publishes details of its holdings. In 2009, Beijing revealed it had almost doubled its gold reserves since 2003, making it the fifth-largest holder of bullion with 1,054 tonnes.

Philip Klapwijk, head of metals analytics at Thomson Reuters GFMS, the consultancy that produced the data underlying the WGC report, agreed that the so-called “official sector” of the central bank and other sovereign institutions may have bought gold in the final quarter of the year. “It could be that the apparent surplus in the domestic market due to the scale of imports reflects official sector purchases,” he said.

However, he added that some of the apparent surplus could be accounted for by stockbuilding by Chinese banks ahead of the lunar new year holiday.

Mr Grubb added that the Hong Kong trade data could yet be subject to revisions, or that other players, such as Chinese sovereign wealth funds or other financial institutions, could have accumulated stocks of gold during the quarter.

But he added: “In the medium term we do know the Chinese central bank and other Asian central banks with large foreign exchange reserves have been increasing their holdings of gold. This is consistent with that.”

Central banks bought about 440 tonnes of gold last year on a net basis, the WGC said, the highest level of buying since 1964. Large buyers included Mexico, Russia and South Korea.

China’s State Administration of Foreign Reserves, which manages China’s $3.2tn in foreign reserves under the Central Bank, has said publicly that it views gold and other commodities as having limited relevance for its investments because of price fluctuations, storage costs and limited transaction volumes.

However, advisers to the central bank have been urging China to diversify its holding of foreign reserves, which is held mostly in US Treasuries and other governments’ bonds.

Demand from Chinese consumers is also rising rapidly, as they pour new-found wealth into gold. The WGC on Thursday predicted that China would this year overtake India as the world’s top gold consumer for the first time.

Additional reporting by Leslie Hook in Beijing

China central bank in gold-buying push - FT.com

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