Commodities Update 29

Commodities Update 29

den 27 januari 2016

Important legal information

The oil price development could be called surprising in the previous week. Additional to the worldwide oversupply of oil, Iran started its oil exports and could produce up to 600.000 barrel per day. However, the late winter and a huge blizzard on the US east coast supported the oil price, complemented by speculations about new monetary policies by the ECB. The result was that Brent increased within 24 hours more than 9 percent.

Nevertheless investors should not neglect fundamental data on oil prices, according to Ole Hansen, analysts of Saxobank. Furthermore Baker Hughes announced that the number of borehole decreased constantly. Baker Hughes’ latest news referred to 510 boreholes. In the context of decreasing oil production in the USA, Saudi-Arabia is still convinced by following an oversupply-policy and keep the oil price on a low level. According to Al-Falih, CEO of Saudi Aramco, the company could persevere this strategy for a long time.

In contrast to oil the sentiment in the precious metals sector lightened up. A difficult situation in the world economy and deflationary tendencies could stoke investor’s hope of new monetary approaches by the ECB. Furthermore investor’s expectations include a slower progress in the US interest rate policy. Calculated in Euro the gold price noted on the highest level since November 2015, EUR 1.020 per troy ounce. Important news will be published on January 29th for gold investors in the USA. A lower GDP could support the gold price.

After losses in copper the market proceeds in a sideways movement. Besides the latest monetary policy of the central bank, China’s market recovers. The biggest Chinese utility company, State Grid Corp. of China, announced to increase activities in grid up to 28 percent in the next five years. 40 percent of the copper demand is covered by State Grid Corp. of China and could quicken the copper price. However, in general the expectations stay cautious.



2022-11-29 15:28:18