The oil price soars – but can it last?
The oil price has risen by nearly 25% so far in 2019, well in advance of any developed-world stockmarket. But the surge may not get a lot higher from here.
The oil price (as measured by the Brent crude benchmark) has risen by nearly 25% so far in 2019, well in advance of any developed-world stockmarket, as oil producers slash production in a "shock and awe strategy", said Goldman Sachs analysts. So far oil cartel Opec and the other big producer, Russia, have reduced output from 31.6 million barrels a day in December to 30.8 million in January. Meanwhile, Venezuela, another big producer, is in meltdown.
But the surge may not get a lot higher from here. Output cuts could be offset by rising US shale production. Last year, US oil producers experienced pipeline bottlenecks (with oil supplies outstripping the capacity to get it to market), but those should ease by the end of 2019. US output is already expected to surpass 24 million barrels a day over the next six years, according to Reuters. And there are signs that US output is set to rise further.
The latest rig count from energy services firm Baker Hughes shows that US energy firms have boosted the number of rigs drilling for oil to 857, from fewer than 800 a year ago, notes Henning Gloystein on Reuters.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Markets aren't ready for this surge in production, reckon Commerzbank analysts.US supplies are growing much faster than expected, yet this"is being completely ignored at present". As a result, "we view the current price rise as exaggerated and see growing correction potential".
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Marina Gerner is an award-winning journalist and columnist who has written for the Financial Times, the Times Literary Supplement, the Economist, The Guardian and Standpoint magazine in the UK; the New York Observer in the US; and die Bild and Frankfurter Rundschau in Germany.
Marina is also an adjunct professor at the NYU Stern School of Business at their London campus, and has a PhD from the London School of Economics.
Her first book, The Vagina Business, deals with the potential of “femtech” to transform women’s lives, and will be published by Icon Books in September 2024.
Marina is trilingual and lives in London.
-
What is the 25x retirement rule and does it work?
The 25x retirement rule has been around for decades but many experts question if it is a suitable strategy
-
When is the self-assessment tax return deadline?
If you are self-employed, rent out a property or earn income from savings or investments, you may need to complete a self-assessment tax return. We run through the deadlines you need to know about
-
Is the market missing the opportunity in energy?
-
6 stocks to buy to invest in Latin America
The region is the world’s one-stop shop, boasting the raw materials required for the energy transition and key foodstuffs to cater for growing populations, says James McKeigue. Here’s how to profit.
-
The demand for oil is slowing and green energy is taking over
The IEA forecasts oil demand growth to slow sharply in the next few years. The end of the era may be underway.
-
Is now the time to invest in oil as oil stocks top the S&P 500?
Tips Oil stocks have enjoyed massive gains in the S&P 500. We take a look at the index’s best and worst performers and if now is a good time to invest in crude oil.
-
Fuel prices could rise again as Opec cuts production
News Major oil-producing countries have decided to cut oil production by two million barrels per day – could this mean higher fuel prices?
-
Why is the petrol price rising again?
Brits are being hit by a triple-whammy of increasing oil prices, a falling pound, and new fuel mix standards that are pushing up petrol prices
-
John Wood Group: needs polish, but has plenty of potential
Tips Oilfield engineer John Wood’s share price has underperformed, its prospects are solid and it looks too cheap
-
Five London-listed stocks to play the coming oil shortage
Tips After peaking in June, the oil price has fallen back and oil companies have fallen out of favour with investors. But with supply predicted to outstrip demand, there are plenty of opportunities to profit. Here, Rupert Hargreaves picks five of the best London-listed oil stocks to buy now.