Investment Idea

Commodities Update 31

11/02/2016 | 1 min read
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Oil companies contemplate production cutback; Precious metals benefit from economic variations

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The oil price continues its decrease. Russia’s negotiation with the OPEC led to a short increase of the oil price. However, this effect was not of long continuance. At the beginning of the new week WTI notes below USD 30 and Brent notes at USD 33.

The huge oil oversupply has influence on investor’s behavior. Because of further reductions in the demand oil producer strive for a meeting between OPEC members and Non-OPEC members for discussing coordinated production decreases, according to Saxo Bank analysts Ole Hansen. Furthermore Hansen underlines that this assumption could be strengthened through a meeting between representatives of Saudi-Arabia and Venezuela. In addition Commerzbank’s analysts highlighted the sustained decrease of drillings in the USA. This fact could be mentioned in prospective conversations about the oil production and underlines the oil company’s attitude.

The gold price rises since January. Precious metals could benefit from the volatile US-economy and its interest policy. According to the Fed Fund Futures the probability of further raises in the interest rate is around ten percent. Because of this prospect and consequently the weak US-Dollar Bloomberg notices constant growth of gold-ETFs.

Besides gold the copper price notes a constant increase since New Year’s beginning. China announced improved economic data and pushed the copper price from USD 4.300 per ton up to USD 4.700 per ton in the last weeks. But Barclay’s analysts mentioned to defer changes in the fundamental data of precious metals development, before talking about a sustainable increase.