Oil prices fell sharply today, losing more than 2%, which is associated with the publication of a report on oil reserves in the United States, as well as news that Saudi Arabia increased oil production last month.

Data provided by US Department of Energy showed that during the week from 28 March to 3 April oil reserves increased by 10.9 million barrels to 482.4 million barrels, while experts waited for an increase of 3.4 million barrels. The report also reported that weekly growth of commercial oil reserves was the most significant since March 2001. Meanwhile, the oil terminal in Cushing rose by 1.2 million barrels to 60.2 million barrels, the highest since April 2004. Gasoline inventories rose by 817,000 barrels to 229.9 million barrels. Analysts had expected a decline of 1.3 million barrels. Distillate stocks fell by 250,000 barrels to 126.9 million barrels, while analysts had expected an increase of 900,000 barrels. Utilization rate of refining capacity increased by 0.7% to 90.1%. Analysts expected growth rate of 0.5%.

Meanwhile, today's oil minister of Saudi Arabia, Ali al-Naimi said that in March the kingdom from Central 10.3 million barrels per day, exceeding the previous record figure of 10.2 million award in August 2013. In the near future average daily production will remain close to 10 million barrels, said al-Naimi. Recall, Saudi Arabia, the world's largest oil exporter, accounting for more than 10% of world production. Meanwhile, Al-Naimi said again that Saudi Arabia is ready to raise rates, but only with the participation of non-OPEC.

"Although production may decline slightly in April and May, it is clear that Saudi Arabia responds to increased demand for its oil, despite the excess of oil on the market" - said the analyst Amrita Sen Energy Aspects.

Focus was also the monthly report from the International Energy Agency. Agency experts predict that the price of oil could fall to $ 15 a barrel next year, if the sanctions against Iran will be fully terminated in the event of reaching a final agreement on the country's nuclear program. "The increase in Iran's oil supply to the world market will reduce the IEA forecast oil prices in the $ 5-15. If a comprehensive agreement that will lead to the lifting of sanctions on Iran, is reached, the forecasts for the volume of oil supply, demand, and prices can significantly change, "- said the IEA. The agency estimates, Iran could increase production by at least 700 thousand. Barrels per day in 2016 (in March, the average volume of oil production in Iran 2.85 million barrels per day). According to the IEA, increase production Iran will lead to an increase in world oil reserves of about 500 thousand. Barrels per day in 2016. According to IEA forecasts (excluding the possible increase in production in Iran), the average price of WTI crude oil in 2016 will be $ 70 and Brent - $ 75.

May futures for US light crude oil WTI (Light Sweet Crude Oil) dropped to 51.66 dollars per barrel on the New York Mercantile Exchange.

May futures price for North Sea Brent crude oil mix fell 1.42 dollars to 56.95 dollars a barrel on the London Stock Exchange ICE Futures Europe.

Gold prices declined moderately today, but remained above $ 1,200 per ounce, which is associated with the strengthening of the US dollar and expectations of the publication of the protocol of the last meeting of the FOMC. Remember, today at 18:00 GMT Fed will publish the minutes of the meeting of the Committee on Open Market (FOMC) Federal Reserve on March 17-18. "Gold will cost a little less $ 1,200 per ounce as the dollar remains stable. Investors will try to guess when the Fed will raise the rate, considering each statistics, every document," - said analysts IG Ltd. It is worth emphasizing the delay in raising interest rates tend to contribute to the demand for gold, as it reduces the relative cost of metal retention by ensuring increased profits for investors.

The course of trade also affected the statement made by the Fed Powell, who noted that a significant increase in the dollar has a negative impact on the economy. According to him, the first rate increase may occur in June, but the state of the US economy may force the regulator to push this decision at a later date. Powell added that markets alone can give a signal indicative of the need for policy tightening. At the same time, he spoke in favor of the "progressive" approach to raising the cost of lending.

Decline in gold prices is also due to the weakening of investment demand for gold bullion. Gold reserves in the largest investment fund SPDR Gold Trust fell Tuesday at 2.39 tons to the level of 733.06 tons, which is the lowest since January 16, 2015.

Physical demand for gold in China is not very high - the price of the Shanghai Gold Exchange is almost equal to the reference spot price. "The Chinese have a more interesting investment options than gold. Stocks are rising, and now they can still buy futures on bonds. With this in mind, investors do not see any reason to buy precious metals," - said an analyst at Phillip Futures Howie Lee.

May futures for gold on the COMEX today fell to 1204.00 dollars per ounce.

Oil is trading lower today after yesterday's strong rally as data reported yesterday showed that U.S. stockpiles grew more-than-expected and Saudi Arabia, the OPEC's biggest producer reported a record output for March of 10.3 million barrels per day. Saudi Arabia's oil minister Ali al-Naimi said that the output is likely to remain at that level or eve increase with the return of Iran. Iranian exports are, according to experts, not likely to increase till 2016.

API Crude Oil Inventories rose by 12.2 million barrel, far more than the expected increase of 3.4 million barrels. Now market participants await the official weekly inventory report of the Energy Information Administration scheduled for 14:30 GMT.

Brent Crude lost -1.22% currently trading at USD58.38 a barrel. On January 13th Crude set a low at USD45.19. West Texas Intermediate dropped -2.22% currently quoted at USD52.78.

Oil prices declined sharply in recent months as worldwide supply exceeds demand in a period of low global economic growth, pushing stockpiles to record highs and weighing on prices.

Gold is trading higher today, holding above the USD 1,200 level, after retreating for two days at the start of the week. Today the FOMC minutes will be in the focus for further indications on when the Federal Reserve is going to hike benchmark interest rates. Yesterday the U.S. Bureau of Labour Statistics released its Job Openings and Labour Turnover Survey (JOLTS) report on Tuesday. Job openings climbed to 5.133 million in February from 4.965 million in January. It was the highest level since January 2001. January's figure was revised down from 4.998 million. Analysts had expected job openings to rise to 4.978 million.

A stronger US dollar is putting pressure on gold, as it reduces the metal's appeal as an alternative asset and makes dollar-denominated commodities more expensive for holders of other currencies. Meanwhile, the delay in raising interest rates contributes to the demand for gold, as it reduces the relative cost of holding the precious metal.

Gold is currently quoted at USD1,210.90 +0,15% a troy ounce, still slightly above the USD1,200 level. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40. On Tuesday the 17th of march gold traded as low as USD1,142.50, a three-month low.

BLOOMBERG

Forget Interest Rates, the Fed Has Another Big Decision to Make in the Next Year

In case exiting years of zero interest rates won't be hard enough, Federal Reserve officials have another challenge approaching quickly: when to begin unwinding trillions of dollars of bond purchases that constitute the world's largest fixed-income portfolio.

Less than a year from now, the Fed must decide whether to reinvest $216 billion of proceeds from Treasury debt maturing in 2016, or shrink its balance sheet by allowing it to expire. By not reinvesting, the Fed would increase the supply of securities available to investors and put upward pressure on yields.

Shrinking the $4.2 trillion portfolio will add to the monetary tightening from increases in the benchmark interest rate officials envision for this year. That would mark a reversal of the easing the Fed achieved when it bought bonds to speed a recovery from the worst recession since the 1930s.

Source: http://www.bloomberg.com/news/articles/2015-04-08/2016-fed-balance-sheet-decision-looms-beyond-rate-liftoff

REUTERS
Oil down on U.S. stock build, record Saudi output

(Reuters) - Oil prices fell more than a percent on Wednesday as industry data showed a larger-than-expected weekly increase in U.S. stockpiles and as Saudi Arabia reported record output in March.

The decline in prices followed a rally on Tuesday, when U.S. crude approached 2015 highs following strong jobs data and government forecasts for lower U.S. crude production growth and higher global demand for oil.

"We're going to need to see a very big uptick in demand to offset that supply," Ben Le Brun, analyst at OptionsXpress in Sydney said. "There is a glut of supply in oil at the moment."

Source: http://www.reuters.com/article/2015/04/08/us-markets-oil-idUSKBN0MZ03320150408

BLOOMBERG

Shell Will Buy BG Group for $70 Billion in Cash and Shares

Royal Dutch Shell Plc agreed to buy BG Group Plc for about 47 billion pounds ($70 billion) in cash and shares, the oil and gas industry's biggest deal in at least a decade.

The acquisition is the most significant response yet to the slump in oil prices and could set in motion a series of mergers as the largest energy companies look to cut costs and restore profits.

Shell will pay 383 pence in cash and 0.4454 of Shell's B shares for each BG share, BG said in a statement today. That's equal to about 1,367 pence a share and gives BG a market value of about 47 billion pounds. It's a premium of about 50 percent on BG's closing share price yesterday.

Source: http://www.bloomberg.com/news/articles/2015-04-08/shell-will-buy-bg-group-for-70-billion-in-cash-and-shares

(raw materials / closing price /% change)

Oil 53.98 +3.53%

Gold 1,208.20 -0.20%