Should you top up on oil?

Oil’s middling price range is holding, and a slump looks unlikely. Max King picks a good way to buy in to oil

The recent drop in the oil price to just above $50 a barrel has given new heart to the bears, who point out that the oil cartel Opec's attempt to curtail production was always doomed to failure, given that its members control just a third of global output. Meanwhile, James Anderson, co-manager of the Scottish Mortgage Investment Trust, warns that "the age of fossil fuels is over", thanks to the growth of alternative energy and electric vehicles.

Perhaps that's true. But for now at least, demand for oil is running at 96 million barrels per day (mbpd) and continues to grow by about 1mbpd each year. And new discoveries or extensions of existing oil fields are needed every year to satisfy demand, as older ones are depleted. Yet the big oil companies have had their fingers burnt on major projects. For example, Shell spent $7bn on drilling in Arctic waters before it stopped in 2015.

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Max King
Investment Writer

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.

After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.