Be the first to read about algo trading analysis, research and news

Don’t worry, we want spam you! We only send about 2 emails per month.

Subscribe to: Newsletter
Algorithmic Trading Blog

Algorithmic Trading Blog

Automated Trading System Development
Quantitative Trading Research
Portfolio Backtesting

In trade and finance, the commodities marketplace is of the highest importance. It’s just because commodities will be what fuels the services industry. The gas and oil industry, for instance, is amongst the most critical within the globe because it’s one which fuels the economy. Gas and oil companies, as a consequence, save their cash in banks; therefore improving the finance industry. The same will happen with additional commodities like copper, corn, beef and gold. Thus, as there’s weak prices in oil inside Nigeria or Saudi Arabia, the finance marketplace is going to be impacted.

Crude Oil

It’s an extremely crucial commodity these days. It’s just because oil will fuel the engines, which in turn, will improve how business is done. Within the last five years to the year 2014, the prices of crude oil were upon its bull run, and then peaked at $113 per barrel. And then, things began to change in the middle of the year 2014 which led up to a dip within the prices of crude oil to $37 per barrel within August.

The fall led to substantial impacts within the world economy. Net exporters of commodities like Saudi Arabia and Nigeria lowered their expectations and showed how oil is going to play a key role. Countries which import oil, conversely, increased their expectations, yet on a more gradual margin due to the solid dollar.

Within a recent report, oil prices are going to average $49 per barrel in the year 2015, as well as $54 in the year 2016. It may be viewed inside the below chart.


In the financial marketplace, the impact of those figures are highly significant. Companies which handle gas and oil had shares decline by extremely large margins. As can be viewed in the below chart, shares of Royal Dutch Shell fell from $72 down to $48 within the year 2015.


Exxon Mobil, simultaneously, also has had a poor year as can be viewed in the below chart.


Within a report, recently prices of oil are more than likely to increase $57 for the year 2016. But, this isn’t probable going by all of the latest trends with prices of oil trending lower. In addition, this is going to be impacted by the deal in Iran which was signed last August of the year 2015 and whose impact is expected within 2016’s first quarter.

For every day trader, all of those include opportunities for going short or long on the price of oil. The amount of news in regard to crude is rising which is going to lead to more opportunities. Besides all of this, the government in the U.S. raised interest rates within December. If its plug gets pulled, the impact is going to be that oil prices are going to rise higher as businesses set themselves up with these newer rates.

Copper

For copper, as can be viewed in the below chart, the year 2015 has been poor. Prices have dipped between $3.35 and $2.267. It’s a five-year low for the commodity that is utilized around the globe by energy businesses. In addition, those levels were last witnessed within the global recession of back in 2008.


As a consequence, this has offered great opportunities for short sellers within copper and additionally in businesses involved in copper mining. As can be viewed in the below chart, one of the biggest miners of copper, had an extremely poor year for its investors.


The exact same trend was repeated by McMoRan/Freeport whose price/share experienced a lower trend.


Gold

In order to better comprehend the movements within the price of gold, it’s vital that you associate it with the dollar price in America. The American dollar has experienced its best year in 2015 within over ten years with the dollar index attaining $104. Thereby, as the American dollar increases, the impact within the prices of gold is that they are going to dip. It’s evident, as can be viewed in the below chart.


It has had numerous impacts on businesses involved in gold mining. As can be viewed in the below chart, the leading producer of gold, AngloGold Ashanti, has experienced its share of decline in price by a substantial margin.


In all of the above instances, day trader opportunities now have been huge. For the long-range investor, commodities marketplace opportunities has been restricted. As a matter of fact, the majority of long-range investors in commodities have witnessed their profits vanish in the year 2015. Also, the low prices are buying opportunities for those commodity assets with any chance of normalizing expected as the fed raises the interest rates.

 

Comments
Post has no comments.
Post a Comment



Captcha Image


Ready to Learn More?

We welcome your messages/calls and we reach out to you as soon as possible to provide more information including in-depth reports for our results and performance. Our CEO will contact any prospective Client personally.

Our office info

  •   info@quantsavvy.com
  •   US/Canada Toll Free: 1-800-820-3275
  •   Rest of World: +44(0) 247-671-2812
  •   Kemp House, 160 City Road,
    London, EC1V 2NX
    United Kingdom

Connect with us

Contact us - we respond very quickly, email anytime or call from 9am to 5pm GMT London

Send us a Message