23 Dec 2014
Precious metals recede on excess supply over demand – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis and Research at MarketPulse, shares that slow global economic growth has led to decrease in demand for commodities, in turn affecting commodity-sensitive currencies and economies.
Key Quotes
“Stunted global economic growth has reduced the demand for all commodities. Base and precious metals prices have receded as supply has overshot demand, in turn punishing commodity-sensitive currencies and economies.”
“Garnering most of the headlines of late has been the dramatic slide in the price of oil in the latter half of 2014. Oil prices have hit lows not seen since 2009. Precipitated by a slowdown in China’s economy, it remains to be seen if the Organization of Petroleum Exporting Countries’ supply constraints will drive up the price again, especially after the U.S. increased its shale oil production thanks to technological advances in extraction.”
“But questions abound over the longevity of the shale oil boom stateside remain unanswered. After all, for shale oil producers, the cost of fracking (the process used to extract oil or gas trapped in subterranean rock) is more expensive than conventional drilling.”
“Moreover, the good times for shale oil producers may not last. It’s been said that by the end of this decade, shale oil production in the U.S. could flatten as underground supply is depleted.”
Key Quotes
“Stunted global economic growth has reduced the demand for all commodities. Base and precious metals prices have receded as supply has overshot demand, in turn punishing commodity-sensitive currencies and economies.”
“Garnering most of the headlines of late has been the dramatic slide in the price of oil in the latter half of 2014. Oil prices have hit lows not seen since 2009. Precipitated by a slowdown in China’s economy, it remains to be seen if the Organization of Petroleum Exporting Countries’ supply constraints will drive up the price again, especially after the U.S. increased its shale oil production thanks to technological advances in extraction.”
“But questions abound over the longevity of the shale oil boom stateside remain unanswered. After all, for shale oil producers, the cost of fracking (the process used to extract oil or gas trapped in subterranean rock) is more expensive than conventional drilling.”
“Moreover, the good times for shale oil producers may not last. It’s been said that by the end of this decade, shale oil production in the U.S. could flatten as underground supply is depleted.”