17.02.2016 - The fall of oil according to our estimates will continue

The price of gold has stabilized around the level of 1200 dollars per troy ounce after corrected against the background of declining demand for defensive assets and improving expectations about the Fed raising interest rates. Today, the dynamics of trading will affect the data on the housing market in the US (13:30 GMT) and the volume of industrial production in the US (14:15 GMT), and the publication of the previous Fed meeting minutes (19:00 GMT). In the near future the price growth may resume in case of a resumption of the negative dynamics of oil prices and stock markets, but in the medium term, we expect a price drop to 1000 dollars per troy ounce.

The futures price of Light Sweet crude oil fell after meeting of representatives of Saudi Arabia, Russia, Qatar and Venezuela where was decided not to increase oil production. It is worth noting that in January, production in Saudi Arabia was about the maximum levels and the agreement has no value for the oil market. Iran, according to our estimates will refuse to accede to this agreement and will continue to increase the supply of oil, which will lead to the continuation of the negative dynamics of prices with the targets at 25 and 22 dollars per barrel. We maintain our medium-term negative outlook, and see no reason to change the trend in the coming months.

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