Dubai TV Interview, Nov. 1, 2021

Hosted by Dubai TV, Mohamed Hashad, Director of Research and Development at Noor Capital, said that there are factors that could pressure oil prices during the upcoming period. Given that it is one of the most traded assets in the markets, it is sensible that oil prices occupy traders and investors’ thinking.
Oil recorded a weekly decline. This is true, but it is also true that oil recorded strong surges over last October. The factors that tend to pressure oil prices are led by the rise in inventories announced last week and the increase in the number of American drilling rigs, in addition to the high expectations about the OPEC+ meeting, on Thursday 4 November.

Hashad added that it is possible that the OPEC + could increase production, from the current level of 60,000 barrels up to one million barrels per day. He also pointed out that Tehran’s dispute with Western countries over the nuclear agreement has returned to the news headlines again, as Iran seeks to lift sanctions, which in turn may lead to an increase in supply in the markets. Hashad believes that OPEC+ is now encountering a critical situation, on the one hand, OPEC must avail the required quantities of oil, on the other hand, this needs to be done at higher price in order to achieve the largest possible gains, but inflationary pressures are still pressuring on prices, therefore the markets may witness more and more fluctuations closer to decline in oil prices in the near future.

The Director of Research and Development at Noor Capital also highlighted a number of important developments in the markets that are eying the U. S. Federal Reserve Bank’s meeting.
According to Hashad, markets are awaiting a crystal clear decision that may make the Federal Reserve’s meeting in November different from previous meetings. “I think That Jerome Powell should set a clear schedule to begin tapering asset purchases”, Hashad said.

Hashad pointed out that all expectations and speculations by observers suggest the possibility of setting a clear schedule for tapering, which will mean reducing asset purchases, and accordingly anticipated U. S. dollar highs, because this reduction would impact the amount of U. S. dollars available for trading, and this will eventually lead the dollar to surge.

Regarding the BoE meeting, traders are waiting for the MPC meeting and there is also some speculation that the BoE is in the process of tightening monetary policy, and then starting to raise rates.

As for gold prices, and whether it will continue to rise in the upcoming period, or will return to a gradual decline, Hashad suggested that gold will tend to decline gradually, and there are technical reasons that support this view, on top of which is the stability of gold trading below the level of 1799/1800 dollars, the market sentiment isaround USD1800 per ounce.

The possibility that the Fed will taper asset purchases and then higher interest rates could follow, will set the scene for pressures on the dollar, in addition to the high yields of Treasury bonds, which are considered a guaranteed equity that provides investors with better returns compared to gold, and therefore the markets may witness a decline in prices gold in the near future.