The oil fair price level

Daily Analysis - 12/02/2019

Egypt’s petroleum minister believes in fair oil price level

fair-oil-price


Based on what Egypt's Petroleum Minister said there is a reasonable cost for a barrel of oil and it’s believed that the OPEC and its non-OPEC associates are approaching a fair deal.

On Sunday Egypt's Petroleum Minister El Molla said to CNBC “It is in the range between $60 and $70 a barrel … somewhere in this bracket," after a question, if oil prices moved at a satisfactory level to retain producers and consumers happy he replied “If prices of crude increase significantly we would start to see inflation and an exaggerated slowdown in consumption from the other side. If we see prices go down below a certain price then we will see a slowdown in investments."

Japan rose more than 2%


On Tuesday, Asian stock markets ended higher including the major stocks in Japan leading the action. The Topix increased more than 2% percent and ended its trading day at about 1,572.59 while Japan's Nikkei 225 bounced up more than 2.6% to close at around 20,864.20. Shares of Fast Retailing climbed 3% while chip company Renesas Electronics went up more than 16%. The Shenzhen component climbed about 1.1% to finish at 8,010.06. The Shanghai composite also gained 0.6% to finish at 2,671.88.

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Gold slips


On Monday Gold declined as traders run to more safe heaven assets due to the US – China trade dispute, all this while concerns mounted over a slowdown in global growth. The U.S. gold futures descended almost 0.5% to $1,312 per ounce. Spot gold dropped more than 0.4% to $1,308.45 per ounce following the upward move in the previous two sessions. Mitsubishi analyst Jonathan Butler said" The dollar seems to be the main beneficiary of the fears of an economic slowdown, pushing gold down," "But gold has managed to be above $1,300 level, which is a fairly solid and decent support level since there are some downward pressures right now."

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Greenback approaching 2019 tops


On Tuesday the popular greenback continued to be constant against its rivals, hanging near its 2019 top. This was while the global growth worries and the US – Sino trade disputes weakened the greenback's safe-haven demand. Traders are concentrating now on the high-level trade discussions in China this week where the U.S is foreseen to continue pushing China on their requests. Sim Moh Siong, currency strategist at Bank of Singapore said “The dollar is benefiting from the investor nervousness around the trade talks."

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