Oil prices rose modestly today, breaking the level of $ 47 per barrel (WTI) and $ 55 per barrel (Brent), which is associated with the weakening of the US dollar.
The sharp drop in the US dollar came amid uncertainty about US monetary policy after Wednesday the Federal Reserve lowered its estimate of economic growth and inflation, as well as forecasts of interest rate hikes. Recall dollar-denominated oil futures contracts tend to rise in times of a weakening dollar, as oil becomes cheaper for buyers in other currencies.
Pressure on prices had a statement by the Minister of the oil industry in Saudi Arabia, Ali al-Nuaimi. He said that oil production in Saudi Arabia is currently about 10 million barrels of oil per day, and the kingdom sees no need to increase the volume of oil production capacity to 12.5 million barrels a day. Observers are closely monitoring the volume of oil production in Saudi Arabia, as the country is the world's leading oil exporter and the most influential member of OPEC. In November, the Kingdom insisted on retaining the current aggregate limit production cartel to maintain market share, refusing to support prices by reducing the production of oil.
Meanwhile, on Sunday, Al-Nuaimi also said that OPEC's decision to maintain the previous limit production had any mysterious reasons. According to him, OPEC may lose market share in the case of production cuts.
As investors continued to analyze the report Friday from the company Baker Hughes. It was reported that last week in the United States ceased to operate another 56 rigs, their total number dropped to 1069. The number of oil drilling decreased by 41 and totaled 825. displace drilling primarily in Texas - it ceased to operate 36 facilities, 19 of them - in the pool Permian, which produces oil shale. During the year the number of drilling on the two largest US shale basins - Permian and Eagle Ford - has fallen by almost half. The total number of drilling in the country for the year fell by 40%.
Impact on oil prices have also data information company Genscape Inc. Earlier Monday, the company reported that for the week that ended on March 20, at the largest oil reserves in the United States Cushing terminal increased less than in previous weeks. A week earlier at the terminal stocks rose by 2.9 million. Barrels - up to 54.4 million. Barrels.
May futures for US light crude oil WTI (Light Sweet Crude Oil) rose to 46.24 dollars per barrel on the New York Mercantile Exchange.
May futures price for North Sea petroleum mix of Brent rose 37 cents to 55.52 dollars a barrel on the London Stock Exchange ICE Futures Europe.
Gold prices consolidated after a three-day rally, but remain near two-week high, as the weak dollar and the Fed's caution on the timing of a possible rise in US interest rates have a negative impact on demand.
Experts point out, despite the fact that last week the outlook for the beginning of the tightening was revised later date, rate hike in June is still not ruled out, so investors have so far refrained from opening large long positions on gold.
Little support prices has concerns about the future of Greece in the eurozone. German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras will hold talks in Berlin today. They will discuss issues related to goszadolzhennostyu Athens and the process of implementation of reforms, as well as the relationship of the new Greek cabinet with creditors.
In focus were also statements of the ECB Draghi, who pointed to the acceleration of economic growth in the eurozone amid falling oil prices, improvements in external demand, easing financial conditions in the current course of monetary policy, as well as the weakening of the euro. According to Draghi, the Central Bank forecasts, which were revised upward, clearly show optimistic regulator. As for inflation, the head of the ECB said that in the coming months, it will remain at low levels or even moved into negative territory. However, by the end of the year growth in consumer prices will begin to accelerate due to the rise in oil prices and the weakening of the euro.
We also learned that in the week ended March 17, hedge funds and money managers again reduced their bullish position on gold and silver futures and options. It is worth emphasizing the decline recorded for the sixth consecutive week.
Meanwhile, the world's largest reserves of the gold-ETF-fund SPDR Gold Trust on Friday fell by 0.72% to 744.4 tons (at least the end of January).
On the physical market, a decline in demand compared to the previous week. Prize for gold in China compared to London was a $ 4- $ 5 per ounce compared to $ 6- $ 7 on Friday.
May futures for gold on the COMEX today rose $ 2 - up to 1187.00 dollars per ounce.
Oil is trading lower today after comments from Saudi Arabia's oil minister Ali al-Naimi who reiterated on Sunday that Saudi Arabia and the OPEC, whose members account for 40% of worldwide production, won't cut production as long as non-OPEC-producers do not cooperate. He repeated again that the market determines the price and that Saudi Arabia will keep production unchanged in order to fight for market share. Brent Crude lost -1.14% and dropped below USD55 currently trading at USD54.69 a barrel. On January 13th Crude set a low at USD45.19. West Texas Intermediate lost -1.91% currently quoted at USD45.68. On Friday Baker Hughes reported that the number of active drilling rigs in the U.S. further declined for the 15th consecutive week to the lowest level in 4 years.
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 slightly lower today but still above USD1,800 taking a breather from the recent three-day rally. The somehow dovish FED statement still lends some support to the precious metal and ongoing uncertainty over the Greek bailout and its future in the Eurozone add to bullish investor's sentiment. Now investors look ahead to Tuesday's U.S. inflation data.
Recently a strong U.S. dollar and the prospect for higher U.S. rates weighed on the precious metal - as gold is dollar-denominated and not yield-bearing. Now, after the FED removed the 'patient' wording but gave a more dovish outlook on inflation and growth and the greenback is trading lower, gold finds some support.
Gold is currently quoted at USD1,181.30, -0,07% a troy ounce. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40. On Tuesday last week gold traded as low as USD1,142.50, a three-month low.
BLOOMBERG
Pound Emerging as Election Loser Whichever Party Seizes Victory
(Bloomberg) -- The likely outcome of Britain's general election is finally becoming clear. The outcome, that is, for the pound.
In a bearish sign for the currency, traders are paying more to hedge against sterling losses versus the dollar now than in the weeks before the Scottish independence referendum back in September. Opinion polls ahead of the May 7 vote put the Conservative and Labour parties virtually neck and neck and investors say there are dangers whichever one ends up running the government.
"All paths lead to a degree of sterling weakness," said Daragh Maher, a London-based strategist at HSBC Holdings Plc, which sees the pound falling more than 2 percent to $1.45 by year-end. "Traditionally the pound does better if the Conservatives are expected to win and does worse if Labour are set to win. That doesn't hold so closely this time around."
REUTERS
Fed's Bullard says dollar near fair value but path unclear
The dollar index is not far from fair value but it is unclear how much more the U.S. currency will strengthen against the euro, St Louis Federal Reserve President James Bullard said on Monday.
Speaking on CNBC, Bullard also said an exit of Greece from the euro would be possible but prove very painful for Greece itself.
"I think it's (Grexit) much more manageable than it would have been a couple of years ago and so I do think it could be done but I don't think it's advisable to try to go down that path," he told CNBC in an interview.
Source: http://www.reuters.com/article/2015/03/23/us-fed-bullard-idUSKBN0MJ0O920150323
REUTERS
Oil drops as Saudi says will not cut output alone, weak China import hurts
(Reuters) - Oil prices dropped more than 1.5 percent on Monday as China's imports weakened, while comments from top exporter Saudi Arabia that it would not unilaterally cut its output to defend prices also dragged on the crude market.
China's February crude oil imports from Iran fell 3.7 percent from a year ago to 2.04 million tonnes. China boosted overall imports late last year, taking advantage of cheap oil to build its reserves, but storage tanks could be reaching their limits, forcing a slowdown in orders.
Weak demand from top energy consumer China comes at a time when the OPEC kingpin Saudi Arabia has reiterated its decision to keep production unchanged and ride out a market slump, which has roughly halved prices since last June.
Source:
(raw materials / closing price /% change)
Oil 46.57 +2.28%
Gold 1,185.00 +0.03%