In February of this year, the market realized that the Federal reserve would not dare to implement its plan to quadruple the rate increase this year, and the U.S. dollar began to weaken.
Despite a serious difference in the monetary policy of the American regulator compared with other major Central banks, the us currency falls still. Some experts even suggest that there is some tacit agreement under which it was decided to allow the dollar to weaken.
But the reasons of falling of the American currency at this stage we are not really interested in. It is curious to observe the relationship between the value of the dollar and commodity prices and in particular oil.
All perfectly understood, as in 2014, many analysts explained the collapse in oil prices it is the strengthening of the dollar, and then there was a version with oversupply.
The relationship of the dollar and the cost of the raw materials really are. Economic survey Grigory Beglaryan shared her observations.
Index raw CRY from the historical point of view has a very strong correlation with the dollar.
The fact is that when the dollar index shows a decline for two consecutive months, almost always follows a reversal of the local trend in commodities. DXY closed below the November-January and March, below February.
From a technical perspective the dollar index has all chances to reach 88. In this scenario, quotes of Brent crude oil may reach $50 a barrel.
Now, while the price per barrel of the mixture is being traded near $40, for a total of $2.5 from local maxima. Judging by the graph, if nothing changes in the coming weeks we may see $46 per barrel.
However, the price of oil depends not only on the dollar but also on other factors and moods of speculators.
On Thursday, for example, it became known that Russia, Iran and Iraq have increased oil production. Moreover, according to calculations by Bloomberg, the production growth recorded in the OPEC countries.
These reports provoked quite a strong drop in prices, however, by the end of the day it managed to almost completely neutralize.
The Opinion Of Goldman Sachs
Goldman Sachs says that $35 per barrel – and not too expensive and not too cheap. This is just the perfect price, making a very attractive stocks of U.S. companies engaged in exploration and production.
While Brian singer, senior Bank analyst, admits that such a price is really below cost of production at many North American projects. However, it is $30-35 per barrel scare off small kancevica and will force them to stop to prevent larger companies to conduct normal business. If the indicated range would last at least for awhile, by 2017 quotes of WTI will rise to $55-60 per barrel, according to Goldman Sachs.
Average price, predicted Goldman Sachs in II quarter – $35. The results of 2016 it is expected to grow to $38, and in 2017 the average is 57 and a half dollars per barrel WTI.
