On Friday the US will release an important report on employment in August, which investors will make predictions about the future monetary policy of the fed. Fed officials keep saying that the decision to raise rates will depend primarily on economic indicators. “We believe that the chances for a fed rate hike this year make up more than 80%”, – said the chief analyst of markets at ThinkMarkets Hire Aslam. “If Friday’s employment figures in the non-agricultural sector of the USA will be strong, we expect that September will be more unpredictable month, and at the moment the likelihood of increased interest rates by the fed in September is about 35%”. Economists polled by MarketWatch predict growth in the number of jobs in the U.S. in August by as much as 160 thousand. “I don’t think at the moment when we start to raise rates, we will know whether it is a one-time increase or re-raise. It depends solely upon what will happen with the economy”, – said the Deputy Chairman of the fed Stanley Fischer on Tuesday in an interview with Bloomberg.
The next fed meeting will take place on 20-21 September. The next meeting will be held November 1-2, right before the presidential election in the United States. The last meeting in 2016 will be held on December 13-14.
We believe that before the end of the year, oil prices will rise. The company’s oil production greatly reduced budgets for exploration. This, in turn, has led to the fact that it was discovered only 2.7 billion barrels of oil. According to the consulting company Wood Mackenzie Ltd., this is the lowest level since 1947. At the end of last month, the producers found only 736 million barrels of conventional oil.
The oil and gas sector of the USA still experiences difficulties. According to the latest report, in 2015 the volume of discovered oil accounted for only 10% of the average annual volume of oil discovered since 1960. Thus, it is expected that volumes will continue to decline. This suggests that in the future the number of detected oil may be insufficient to meet demand.
According to the energy information Administration at the U.S. Department of energy (EIA), the expected growth in global oil demand up to 105.3 million barrels in 2026 from 94.8 million barrels per day in 2016. In connection with the slowdown in the exploration, many experts are wondering whether it would be possible to meet this growing demand. Although the shale boom in the United States in principle is able to solve this problem, oil prices remain below $ 50 per barrel, which prevents the development of this industry. Low rates for exploration of oil suggests that oil production may remain low, which should lead to higher oil prices.