Azerbaijan agrees with Shah Deniz Consortium to develop a pipeline and sales of gas to Europe

The Shah Deniz consortium,lead by BP,announced today that 25-year sales agreements have been concluded for just over 10 billion cubic metres a year (BCMA) of gas to be produced from the Shah Deniz field in Azerbaijan as a result of the development of Stage 2 of the Shah Deniz project. Nine companies will purchase this gas in Italy, Greece and Bulgaria.

The Shah Deniz Stage 2 project is set to bring gas directly from Azerbaijan to Europe for the first time, opening up the Southern Gas Corridor.

In total 16 BCMA of Shah Deniz Stage 2 gas will be delivered through more than 3500 kilometres of pipelines through Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and under the Adriatic Sea to Italy.

Today’s agreements for European gas sales follow the signing of agreements with BOTAS in 2011 to sell 6 BCMA of gas in Turkey.

“We are delighted that the years of negotiations led by SOCAR with multiple European companies have come to a successful conclusion. These agreements mark the biggest gas sales in the history of Azerbaijan. They also mark the beginning of direct links between Azerbaijan’s huge gas resources and the European markets. Azerbaijan is committed to long-term cooperation with the Shah Deniz gas purchasers said Rovnag Abdullayev, President of SOCAR.

Commenting on the agreements, Gordon Birrell, Regional President for BP in Azerbaijan, Georgia and Turkey, and President of the Operator of the Shah Deniz PSA, said: “The Shah Deniz consortium is proud to be involved in the conclusion of one of the biggest gas deals in the history of the oil and gas industry. On behalf of the Shah Deniz consortium, I would like to thank all the companies involved in these negotiations.The strong demand for Shah Deniz gas gives us confidence in the long-term development of Azerbaijan’s gas resources. Today’s signings represent another important milestone bringing us closer to a final investment decision on the Shah Deniz 2 project”.

The buyers who have today agreed to buy the gas are: Axpo Trading AG, Bulgargaz EAD, DEPA Public Gas Corporation of Greece S.A., Enel Trade SpA, E.ON Global Commodities SE, Gas Natural Aprovisionamientos SDG SA, GDF SUEZ S.A., Hera Trading srl and Shell Energy Europe Limited. Of the total 10 BCMA, around 1 BCMA will go to buyers intending to supply to each of Bulgaria and Greece and the rest will go to buyers intending to supply Italy and adjacent market hubs.

The completion of these agreements follows expressions of interest from many different companies for Shah Deniz gas and marks the completion of the Shah Deniz 2 gas sales process.

The gas sales agreements will enter into force following the final investment decision on the Shah Deniz Stage 2 project which is targeted for late this year.

The Shah Deniz co-venturers are: BP, operator (25.5 per cent), Statoil (25.5 per cent), SOCAR (10 per cent), Total (10 per cent), Lukoil (10 per cent), NICO (10 per cent) and TPAO (9 per cent).

Source: BP Press Release

EU Commission approves Vodafone takeover of Kabel Deutschland

Vodafone  won EU approval on Friday for its 7.7 billion euro ($10.43 billion) acquisition of Germany's largest cable company, Kabel Deutschland 

British group Vodafone - the world's second-largest telecoms operator - announced the deal in June, which will help the company to fend off rivals in its most important market.

"While Kabel Deutschland primarily offers cable TV, fixed line telephony and Internet access services, Vodafone's core busines consists of mobile telephony services EU Com

"While Kabel Deutschland primarily offers cable TV, fixed line telephony and Internet access services, Vodafone's core business consists of mobile telephony services," EU Comission  added.

Vodafone, which this month agreed the sale of its stake in U.S. operator Verizon Wireless for $130 billion, wants to buy Kabel Deutschland to offer more television and fixed-line services  in Germany, its largest European mobile market.

The British company last week said earlier this week it had secured 76.48 percent of Kabel Deutschland shares, which is above the 75 percent minimum acceptance condition it had set.

So-called "quad-play" services offering TV, broadband, mobile and fixed-line telephony have caught on rapidly in markets such as France and Spain, but the largely fragmented German cable market is still some way behind.

Source: Reuters

Gold and Silver,Profit taking

December Comex gold futures prices are solidly lower in early U.S. trading Friday, as shorter-term traders are taking some profits after the recent strong price gains. Prices are also seeing a downside technical correction after the big rally late this week. December Comex gold was last down $19.70 at $1,349.60 an ounce. Spot gold was last quoted down $15.30 at $1350.25. December Comex silver last traded down $0.747 at $22.545 an ounce.
European markets were quieter in overnight trading and China markets were closed for a holiday. India did surprise the market place with a hike in its key interest rate by 0.25% in an effort to curb inflation and support its currency, the rupee. But overall, the world market place is pausing to catch its breath after a very active 36 hours of trading following the surprise move by the U.S. Federal Reserve on Wednesday 

The U.S. budget and debt ceiling issues are looming and will be hotly debated by the U.S. Congress and the Obama administration the next few weeks. This will become the brakingnews matter for the market place, and one that could be significantly bearish for most markets, as there is already talk the U.S. government could shut down for a short time.

Technically, December gold futures bears have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,400.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,300.00. First resistance is seen at the overnight high of $1,368.40 and then at this week’s high of $1,375.40. First support is seen at Friday’s low of $1,346.20 and then at $1,336.00.  

December silver futures bears have the overall near-term technical advantage. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $24.25 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at this week’s low of $21.225. First resistance is seen at $23.00 and then at Friday’s high of $23.18. Next support is seen at the overnight low of $22.455 and then at $22.25.

Source  Jim Wyckoff   Kitco Metals

Kitco  Metals

Copper futures slip after Bullard's comments

Copper futures slipped in thin trading on Friday, easing after a Federal Reserve official said the U.S. central bank may cut back on its stimulus next month.

The most actively traded copper contract, for December delivery, recently traded down 1.5 cents, or 0.5%, at $3.332 a pound on the Comex division of the New York Mercantile Exchange.

Copper had surged the prior trading session, rallying along with equities and some other commodities after the Federal Reserve's decision late Wednesday to keep its $85 billion-a-month bond-buying program steady.

The Fed's stimulus programs drew buyers to copper on the belief that it will accelerate growth, and, in turn, metals demand. Copper is used in a wide range of manufactured products.

But James Bullard, president of the Federal Reserve Bank of St. Louis, said on Bloomberg TV Friday that "a small taper is possible in October." Mr. Bullard said the Fed's decision to stand pat this week, which surprised many market participants, was "borderline."

After FOMC decision Asian markets are looking for IPO's and fundraising issuing bonds

With the Fed decision to postpone its tapering of his bond buying program.
"With economic fundamentals still weak in some places and investors expecting the Fed to act later this year, companies are trying to seize what could be a brief window in which to do deals. This week saw the most new share sales in Asia since May, while companies outside of Japan have sold US$15 billion of bonds so far this month, the largest amount in four months.

The run of deals comes after a choppy three months, when Asian countries from Indonesia to India were hit by heavy selloffs in their stocks, bonds and currency markets as investors anticipated a tapering of the Fed's quantitative-easing program, which had flooded the world with cash.
For the many Chinese companies looking to list, Hong Kong is the only option because mainland China stopped approving new listings last October amid flagging share prices. Hong Kong's stock market has rallied 8.2% since September, boosting the allure of new offerings. 
For now, the pipeline of stocks and bonds looks healthy, the strongest in months. China state-owned energy company China General Nuclear Power Corp. plans to issue a benchmark U.S. dollar bond, which would be at least $500 million, according to a person familiar with the situation. And Korean companies including Woori Bank are lined up to issue bonds next week, with at least $2.5 billion of funds scheduled to be raised, according to a person close to the planned deals".according to the Wall Street Journal.

Federal Reserve officials created new uncertainty

   In an article published today in the Wall Street Journal says that after the press release of the FMOC:
Fed officials have created new uncertainties, about how long they will keep with easy money.
In the news Conference after the FMOC meeting,Mr Bernanke seemed to have change his mind
on his guidance given in June,where he said that the bond buying program would end in 2014.
Now Mr Bernanke said ''Wednesday that he thought the decision not to begin pulling back on bond purchases was right given a weaker economy than the Fed expected a few months ago and one facing new threats from a fiscal showdown in Washington. He also said the Fed might still proceed with a pullback in the months ahead if the economy cooperates.

In his defense, Mr. Bernanke said that he has never said the Fed would start the pullback in September and that the decision always depended on the economy's vigor. "I don't recall stating that we would do any particular thing in this meeting," Mr. Bernanke said at the news conference.

Germany´s top economic adviser we have to rethink our country´s energy policies

Germany's top economic adviser has called for a radical rethink of the country's energy policies, warning that the green dream is going badly wrong as costs spiral out of control. "We need a drastic policy shift," said Christoph Schmidt, chairman of Germany's Council of Economic Experts. "They haven't paid any attention to costs. These are now huge." The government has vowed to break dependence on fossil fuels and source 50% of all electricity from wind, solar and other renewables by 2030, and 80% by mid-century. But cost estimates have reached €1trn (£840bn) over the next 25 years, The Daily Telegraph says. 

Warren Buffet supports Ben Bernanke

Billionaire investor Warren Buffett has compared the Federal Reserve to a hedge fund, as he supported keeping Ben Bernanke in charge of the US central bank. The 82-year-old, who has led Berkshire Hathaway for more than four decades, hailed the Fed's ability to make money from bond purchases as a result of quantitative easing, which in five years has more than tripled its balance sheet to more than $3.6trn. "The Fed is the greatest hedge-fund in history," he said, according to The Daily Telegraph.

SPAIN RATING MAY BE DUE FOR UPGRADE BEFORE YEAR-END

Not long ago, investors were wondering what would happen if Spain's credit rating was reduced to "junk bond" level in the wake of a succession of reductions to the rating from the leading agencies Standard & Poor ("BBB") and Moody's ("Baa3"). 

But if in the past, analysts and investors did not want anything to do with Spain, they are now beginning to show strong support for the country (the last evidence of which was the "Viva España" report from Morgan Stanley). If this is the current case, then the credit ratings agencies could start to share the same opinion.

Citing sources in the banking sector, specifically financial institutions that work with the Treasury, the Spanish newspaper Expansión reported on Friday that this "change in outlook" has resulted in the public entity and many others in the financial sector to expect "S&P to improve their outlook for Spain's rating to stable prior to the end of the year". Specifically, the president of the Centre for Economic and Politic Research (CEPR), Guillermo de la Dehesa, believes that the agency "is waiting for publication of the official fourth quarter figures that will confirm if the economy has reached the bottom".

Back in June, the company noted that they would be able to revise their outlook on Spain to stable "if we continue to see improvements to the external situation of the economy, at the same time as returning to growth, or if the structural and fiscal reforms, in addition to the support received from the Eurozone, stabilise the credit metrics". 

Source:  LiveCharts

Bank of India hikes interest rate

the Reserve Bank of India [RBI] surprised markets with a 25 basis-point rise in its main policy rate but unwound some short-term tightening measures.

The Bank changed its main policy rate to 7.5% from 7.25% in an attempt to curb inflation which reached a six-month high of 6.1% earlier this week. 

"Bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately," RBI President Raghuram Rajan said.

Source: Livecharts

Precious Metals Prices 8.12 a.m. Eastern Time

Gold Price Futures     3 months    US$  1,253.70

Silver Price Futures    3 months    US$      22.62