26.09.2016 - Volatility of oil will be high this week

The price of gold continued to consolidate after recent gains caused by the Fed's decision not to raise interest rates, which had a positive impact on the attractiveness of gold compared with assets that generate interest income. At the same time, the probability of tightening monetary policy before the presidential election in the US in early November is unlikely. Earlier this week, the focus will be on the debates of the candidates for president of the USA Hillary Clinton and Donald Trump. The growth of the probability of victory of Mr. Trump will lead to increased demand for protective assets. Today, it is worth paying attention to the news on new home sales in the US (14:00 GMT) and on Wednesday we should pay attention to the speech of the Fed chief, which can cause strong movements on the market. Our medium-term outlook remains positive due to the anticipation of the fall on the stock markets.

The price of Light Sweet crude oil fell amid speculation about the future informal meeting of representatives of a number of major oil producers including Russia and OPEC countries. This meeting will be held in the last day of the international energy conference, which starts today and will last until Wednesday. We do not expect reaching a consensus that will be able to affect the dynamics of oil production. Moreover, the drilling activity in the United States continues to increase. Investors are waiting for the publication of report on oil inventories in the United States, which declined recently against the backdrop of a tropical storm. Our medium-term outlook remains negative with a potential decrease by 15-20% in the coming months.

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