Commodity update 77

The oil prices could not participate on the prospect of a possible extension of OPEC’s cut in production. After a weak previous week, Brent is trading near to USD 50. Since the beginning of the month, Brent declined about 9 percent, WTI decrease about 11 percent. While the USA may enhance their oil production, the OPEC seems to prefer an extension of its production cut for another six months. The general secretary Mohammed Barkindo announced his recommendation, since the prices declined further recently. However, Russia and other members still hesitate to agree. Meanwhile, the USA increased their drilling activities and extended their number of rigs with 21 up to 652.

Gold: Investors run into safe havens

Since more and more investors doubt the sustainability and the outcome of US president Trump’s economic policies, the precious metals increased in popularity. On Monday, the price rose with USD 1,261 to a four week high. Especially the slightly weaker development of the USD, which notes on a four month low, reinforced this development. Since the health care reform failed, investors may doubt whether the electoral promises can be realized and prefer investments in other currencies and precious metals.

Positive prospect for aluminium

According to the Aluminium Institute, the supply of the metal increased about 9,7 percent since February. This rise was mainly caused by an growing Chinese production, which produced 22,4 percent more aluminium than in the previous year period. In the first two months of the year the Chinese supply increased about 20,5 percent. However, this development could end in the short term. During the winter times in 2017, the Chinese authorities are determined to cut back the production with approximately 30 percent in 28 cities which shall reduce the local air pollution.