10.03.2016 - Oil prices are likely to resume their decline

The price of gold is falling on the background of improved sentiment on the stock markets, oil price growth and reduction of demand for the precious metal. It is worth noting that today will be held a press conference by ECB President Mario Draghi, during which he will announce the results of the ECB meeting. According to our estimates the stimulus measures will be expanded, which will lead to an increase in the US dollar and a drop in the price of gold. The growth in demand for risky assets and increase in bond yields will negatively affect the price of gold. Our medium-term outlook remains negative and we are waiting for the fall in the near future.

The price of Light Sweet crude oil futures showed strong growth and came close to an important level of 40 dollars per barrel. The reason for the increase yesterday was the news on the US oil and petroleum products inventories. Thus the oil reserves rose to a record for this period level of 521.9 million barrels, that is 3.88 million barrels more than last week. At the same time, gasoline inventories fell by 4.5 million barrels, which indicates an increase in demand. The International Energy Agency has updated the forecast of oil production in 2017 the volume of which will fall to 8.19 million barrels per day compared to the current level of 9.078 million barrels per day. We expect no real consensus among a number of major oil producers whose meeting will be held on 20 March. At the moment, there is an attractive opportunity to open short positions in oil.

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