13.05.2014 - Saudi Arabia can increase oil production
The price of gold rose yesterday amid growing risks related to the separatist referendum in the eastern regions of Ukraine. As a result, neither Ukraine nor the West accepted the results of the survey. Another increase of tensions in the region is expected before the presidential elections in Ukraine, which will be held on May 25. Demand for gold is increasing slightly in Asian markets. The future growth of quotations can be supported by rising geopolitical tensions in the world and the fall on the stock markets. We keep medium and long term positive outlook for gold.
The price of Light sweet crude oil continues to consolidate near the level of 100 dollars per barrel. High prices are supported by limitation of supplies from Libya, where the rebels hold control over some sea ports, as well as due to the tense situation in Ukraine. Traders are also watching the progress of negotiations between the West and Iran on nuclear program of the Islamic Republic. Reaching agreements will increase the amount of oil on world markets. Saudi Arabia yesterday announced its readiness to cover the shortage of oil in the case of the termination of deliveries from Russia. On this background, as well as due to the growth in U.S. oil inventories and the expectation of stabilization in Ukraine, we maintain a long-term negative outlook for oil.