22.09.2015 - Oil production in the US continues to decline
The price of gold fell on a stronger US dollar after the statements of a number of Fed officials. Thus, the president of the Federal Reserve Bank of St. Louis Bullard expects a decline in the US unemployment rate to a level of 4.5% and marks the weak influence of the crisis in China on the US economy. At the same time, according to Mr. Bullard, the Eurozone economy is showing improved growth prospects. Gold prices will be supported soon by the demand in Asia, where it begins the season of holidays and festivals. At the same time, falling incomes of farmers in India is due to weak monsoon that will lead to a decline in demand compared to last year. We expect the price growth in the near future, but its potential is low.
The price of Light Sweet crude oil was not able to continue the growth caused by statistics on reduction of the number of active drilling rigs in the US up to 842. At the same time, the volume of oil production in the US fell to 9.1 million barrels a day in August, compared with 9.6 million barrels day in April. In mid-2016 the Ministry of Energy predicts drop in production to 8.6 million per day. At the same time, oversupply of oil on the market remains and oil reserves in Saudi Arabia rose to its highest level since 2002 - 320 million barrels per day. We expect a further decline in prices now and in the medium term.