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Saudi Aramco based oil company sees no strong impact on its position in Asia

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Saudi Aramco-based oil company does not see any impact on its position in Asia, including India, from the redistribution of Russian oil supplies, has a share in these markets, the head of the company, Amin Nasser, said.

“Regarding the Indian market and imports of Russian oil, we have good relations (with importers in India – ed.), and we are a base supplier due to our reliability for customers both in Asia and around the world,” Nasser said during a conference call for investors, commenting on the impact of the reallocation of Russian oil supplies from Europe to Asia and India on Aramco’s position.

“We haven’t seen any impact from India importing more Russian oil on the supplies that the Saudi Aramco company makes. We continue to maintain our market share in Asia and India. As I said, they perceive us as a basic supplier because of our reliability,” he added.

Western sanctions against Russia due to a special military operation in Ukraine have forced Russian oil producers to divert supplies from the main European market to the Asian market and sell them at a discount. The Asian region is the main market for Saudi Aramco, while China, India, South Korea and Japan are the largest buyers of Saudi oil.

The reconfiguration of the markets allowed Russia to stop the decline in production, which was observed in March and April, as early as in May. At the end of June, Deputy Prime Minister Alexander Novak said that oil production in Russia had almost reached the level of February. Then Russia produced 10.2 million barrels a day. Novak said. In March and April the figure fell to about 9 million, and in June came to an average of 9.9 million.

As reported by Reuters, citing Chinese customs data, in May, Russian oil companies increased shipments to China to a record 8.42 million tons and displaced Saudi Arabia from the pedestal of the largest supplier. In June, Russia maintained its lead. And in August, the International Energy Agency (IEA) stated that Russia supplied more oil to China in June and probably also in July than Europe, and increased July exports to India to a record 975,000 bpd.

Earlier we reported that Gold price at 1810 dollars per troy ounce.

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Brent crude oil futures its lowest since 2021 amid banking crisis

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The cost of May futures on Brent crude oil fell to $72.74 per barrel, losing 0.31%, according to data from the ICE exchange. Brent was trading at about $70 a barrel at its low for the day. That’s a record low for at least 15 months, that is, since December 2021.

WTI prices are also falling, with futures prices down to $66.43 a barrel (-0.46% from last week’s close), according to the exchange. WTI was trading at $64.12 a barrel at its low for the day. This is also the lowest value since at least December 2021.

The market is thus responding to the banking crisis: since the beginning of March, three banks (Silvergate Bank, Silicon Valley Bank, Signature Bank) have closed their doors in the US, and the day before, on March 19, Swiss UBS took over its rival, Credit Suisse, buying the bank for $3.2bn amid fears of its collapse. Investors fear a recession, which may cause a crisis in the banking sector, as a recession, in turn, would lead to lower demand for fuel, the agency said.

“Oil prices are moving mainly because of fears [of further oil price dynamics]. Supply and demand fundamentals are almost unchanged, only the banking problems have an impact,” said Price Futures Group analyst Phil Flynn.

Oil prices lifted from daily lows helped the S&P 500 and Dow Jones indices, which rose Monday, writes Reuters. Traders raised their expectations that the U.S. Federal Reserve would refuse to raise rates this Wednesday to protect financial stability amid banking problems, the agency noted.

“Volatility is likely to persist this week, with broader financial market concerns likely to remain at the forefront,” ING Bank analysts said in a note. They add that the impending Fed decision adds to uncertainty in markets.

Earlier we reported that the price of Brent dropped below $75 per barrel for the first time in more than a year.

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Gold prices will reach $2,075 “in the coming weeks”

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Gold prices may continue to rise, analysts polled by the CNBC TV channel said. In their opinion, the difficulties of banks and a possible turning point in the policy of the Federal Reserve indicate the possibility of a new rise in gold prices.

“I think it’s likely that we’ll see a strong move in gold in the coming months. The stars seem to be aligned for gold, and it could soon break new highs,” said Craig Erlam, senior market analyst at brokerage Oanda.

The expert explained that interest rates are now at or close to their peak, and the market, amid recent developments in the banking sector, is laying on an earlier than previously expected start of rate cuts. They also added that this situation would boost demand for gold even if the U.S. dollar weakens.

This month, Fitch Solutions rating agency predicted that gold prices would reach $2,075 an ounce “in the coming weeks” amid global financial instability, writes RBC. The company also added that gold prices will remain at a higher than pre-pandemic levels in the coming years. Craig Erlam confirmed this forecast.

Other Wall Street experts are also predicting a long-term rise in gold prices. For instance, Tina Teng, analyst for British financial company CMC Markets, thinks that the U.S. Federal Reserve’s sooner departure from its policy of raising interest rates might provoke another rally in gold prices due to the weakening U.S. dollar and falling bond yields.

Earlier we reported that oil prices accelerated their decline, continuing a trend from the beginning of the week.

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Analysts at U.S. bank Goldman Sachs revised its forecast on oil prices

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Analysts at U.S. bank Goldman Sachs, one of the most optimistic forecasts about the cost of oil, changed its earlier forecast about the growth of oil prices to $100 in the next 12 months, Bloomberg said.

Now analysts predict that Brent crude oil will reach $94 per barrel in the next 12 months and $97 per barrel in the second half of 2024, the publication said.

The bank said oil prices have fallen despite rising demand in China, given pressure on the banking sector, recession fears and investor withdrawal.

“Historically, after such traumatic events, price adjustments and recoveries are only gradual,” the bank notes.

This week, the situation surrounding Swiss bank Credit Suisse triggered panic in the markets as oil plummeted to a 15-month low and Brent crude fell 12% to below $73 a barrel.

After the price decline, the bank expects OPEC producers to increase production only in the third quarter of 2024, contrary to Goldman’s forecast that it will happen in the second half of 2023. Analysts at the bank believe a barrel of Brent blend will reach $94 in the next 12 months and trade at $97 in the second half of 2024.

Bloomberg reported that the largest oil exporter, Saudi Arabia, announced higher April oil prices for markets in Asia and Europe.

Earlier, we reported that Iraq and OPEC advocated for guarantees of no fluctuations in oil prices.

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