21.11.2014 - The oil is growing on expectations of OPEC meeting

The price of gold rose slightly yesterday. Investors continue to evaluate the possibility of an earlier raising interest rates by the Federal Reserve and the risk of reducing inflation in the near future will restrain the central bank from such steps. In addition, investors expect a referendum in Switzerland on November 30 about the need to increase the part of the gold up to 20% of the total gold and currency reserves of the country. Now the figure is about 7.8%. Rising stock markets continues which reduces the interest in defensive assets, but the situation may change in the medium term. Today volatility will be low and is possible the fixation of positions before the weekend. Our medium-term outlook remains positive.

The price of Light Sweet crude oil rose on speculations regarding a possible reduction in the oil production quotas in OPEC countries, which have about 40% of world oil production. Meeting of the OPEC will be held on November 27 in Vienna, and reduction the likelihood of quotas for 250-600 thousand barrels per day increased against the background of statements by the representatives of Venezuela and Libya. At the same time, Kuwait and Saudi Arabia stand for the preservation quotas at the current level of 30 million barrels per day. On the other hand the price rose on speculation regarding the growth in oil demand in the US due to the strong growth of the economy. Despite this market imbalances are associated with increased production on the background of weak demand in Europe and Asia. We maintain a medium-term negative outlook, but note the decline of the price falling potential .

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