After a largely stellar year in 2016, the outlook for major commodities was overwhelmingly positive prior to the start of 2017. Reda Bedjaoui, the CEO of Redbed Investments, recently discussed how the market performed during the first half of the year and what investors can expect for the remainder of 2017.
Crude oil, began Bedjaoui, has experienced a considerable amount of uncertainty due to the implementation of OPEC (Organization of Petroleum Exporting Countries) restrictions to control prices while drillers in the US simultaneously expanded their reserves through unconventional sources, including shale formations. There were concerns that high demand would not allow all OPEC members to stick to the agreement, or that rising prices would cause a surge in US productions. However Reda Bedjaoui felt confident that the crude market has reached a balance with American stockpiles down by four million barrels and Russia cutting output by 1.8 million barrels per day. In addition, due to strong demand for air conditioning, falling production, lower injections in storage and increased exports to Mexico and South America, US natural gas prices are up over 33 percent. As OPEC continues to try and influence markets, Bedjaoui expects that another round of production cuts could occur if oil drops below $45 per barrel, which could potentially boost prices to the mid $60 range in 2018-2019.
Gold production has been on the rise while consumption has declined rapidly in the two largest purchasing countries of the good, India and China. However the lack of demand in India, a country that has an insatiable appetite for gold, should be a temporary one as their citizens grow accustom to the demonetization of the product and become used to buying it officially. In other areas of the world, gold has lost its appeal as a safe haven commodity as investors continue to gain confidence in stock markets and their local economies. Bedjaoui believed that there is the possibility for the gold market to regain strength in the second half of 2017, depending on the actions of the EU and the American government. If the Federal Reserve follows through on its promise to enact three rate hikes in the course of the year, the economic recovery of the US could be derailed and revive the precious metal’s appeal to global investors.
Reda Bedjaoui is an expert investor and the CEO of Redbed Investments, LLC. With over a decade long experience of anticipating trends, pricing and demands in commodities trading, he has become a recognized leader on multi-sector international trading. Bedjaoui’s mastery of investment, real estate, governance, risk management and compliance is grounded in his exceptional command of international law. Raised in Paris, France, he received a Bachelor in Law degree from the Universite de Montreal before furthering his education at The Hague Academy of International Law in the Netherlands. He then honed his practice of commercial law, corporate law and international arbitration at globally recognized law firms in Montreal and Paris.
Reda Bedjaoui Discusses the Market Impacts of Brexit One Year After the Vote: https://finance.yahoo.com/news/reda-bedjaoui-discusses-market-impacts-190000873.html
Reda Bedjaoui – Where to Invest for the Rest of 2017: http://www.nasdaq.com/press-release/reda-bedjaoui–where-to-invest-for-the-rest-of-2017-20170724-01408