Oil prices are falling, gold increasing in price

Oil prices continue to fall, gold will not give the bears even a chance

In brief: Gold prices continue previously planned marathon growth with the overall negative stock market and a permanent decline in oil prices.

Gold prices may reach 1250 dollars by the end of the week. Oil prices are dropping every day. Quotes of the oil market on Friday, May 21 closed with a decrease in price amid fears about oversupply of oil in the U.S. and the possibility of slower economic growth in Europe. On the New York Stock Exchange New York Mercantile Exchange price of July futures for petroleum of mark Light Sweet fell by 0.76, or 1.1%, and its price was 70.04 dollars per barrel.

At the exchange InterContinental Exchange Futures Europe in London, Brent crude futures price fell 0.16, or 0.2%, to 71.68 dollars per barrel. On Friday, May 21 quotes on the market of “black gold” closed with a decrease in the price of the following factors: 1 – Economic News – European problems continue to trouble investors, putting pressure on world markets. As the players are aware of the possible consequences of the current debt crisis for the various sectors of the economy, fears are becoming increasingly significant proportions. The situation in Europe is serious concern among the participants of the oil market, as expected against this background that slowing down in the second half of economic activity adversely affect the demand for oil, which has just begun to show signs of recovery;

2 – oil and petroleum products – record amounts of oil at the terminal Cushing, Oklahoma, which is the physical delivery of oil futures traded on NYMEX, continue to have downward pressure on prices of oil futures. Oil stocks in Cushing last week reached a record high of 37.9 million barrels. Capacity of storage facilities in Cushing, presumably, is from 40 to 50 million bbl; 3 – economic data – the flames poured next macroeconomic data for the United States and Europe, which added to fears of slowing world economic recovery and as a consequence, demand for oil; 4 – the price spread – the price spread, or contango between futures trading to the next period of execution and contracts with more distant delivery dates, that is, July and August futures on Friday had grown further, by about 1.50 dollars. Previously, the difference was about 1.00 dollar per barrel. Expansion of contango is sometimes regarded as a sign that oil prices may begin to decline, as it reflects the saturation of the market; 5 – OPEC – the latest data of the Organization of Petroleum Exporting Countries (OPEC) have shown that the daily cost of its oil basket dropped below $ 70 a barrel for the first time since February. Many analysts believe that the steady fall in prices below $ 70 a barrel, OPEC will push to ensure that the official cut oil production in an attempt to reduce excess stocks. Several OPEC ministers said that the organization has been closely monitoring the situation on the market, but has no plans to revise its policy on oil production until the next scheduled meeting to be held in October. From the news it is worth noting that PetroChina, the largest Asian company, plans to buy out its parent company China National Petroleum Corp. of foreign assets. Chairman of the Board of Directors Jiang Zemin said that such a step is being taken to increase the competitiveness of the company. PetroChina intends to spend $ 60 billion on foreign acquisitions. By 2020 the company expects half of the gas and oil to produce abroad. The company now produces outside the country of about 10%. PetroChina plans apply to the U.S., UK and Singapore. Already this year, according to analysts, the net profit to grow by 33%, while Zemin hopes to maintain prices in the range of 70-80 dollars per barrel.

Ukrainian Globalist
2010-05-24 11:47, Economics.

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