Trouble bubbling over oil prices is expected to hit the markets over coming weeks, claim commodity experts at Goldman Sachs.
The US investment banker issued a note warning oil prices are likely to be volatile.
Goldman Sachs says the collapse in oil prices of more than 6% in a day reflected concerns of oversupply.
“It will take a fundamental catalyst for prices to stabilise and eventually trade higher,” Goldman said, indicating that such a catalyst would include physical evidence that The Organization of the Petroleum Exporting Countries (OPEC) production is “sequentially” declining.
The bank said a sharp collapse in demand or the absence of an OPEC production cut would hinder prices recovering.
“While both are unlikely, we are more concerned about the latter, with such a shift leading to sustainably lower prices,” Goldman said.
Gold loses some glitter
The London gold market lost some glitter when new figures revealed the amount of bullion changing hands every day is between three and six times lower than everyone thought.
The London Bullion Market Association (LBMA) has delivered the data for the first time and confirms an average $37 billion of gold is sold every day. The market also sees around $5 billion of silver pass through.
Ruth Crowell, CEO of LBMA, said: “This is an exciting moment for transparency in the Global OTC Market, with the next chapter to include publication of data for platinum and palladium. Sincere thanks to all the LBMA trading members who were ready for day one.”
|v EUR||-0.23%||€ 1.22||-0.003|
|v EUR||-0.27%||€ 0.87||-0.002|