The oil market's lousy fundamentals are starting to take their toll: US futures have fallen to a seven-week low under $75 a barrel. The world's largest energy consumer "looks like it's having a hard time sucking down oil", says Phil Flynn of PEGBest.
Overall US demand (for crude and oil products) is still down by 3.2% year-on-year and oil imports have sunk to their lowest level since 1990. Meanwhile refineries are running at just 80% capacity for only the second week this year.
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
The weak dollar has also been a key prop for oil prices, adds Deutsche Bank, but the correlation has loosened of late. And the dollar now looks set for a bounce. So investors should focus on oil's weak fundamentals. The price will fall back, with US futures averaging just $60 in Q3 of next year, reckons Deutsche. Meanwhile, Global Insight's Nariman Behravesh expects oil to drop to $65 by the spring.
-
Reeves urged to axe stamp duty from UK shares held in an ISAChancellor Rachel Reeves is reportedly considering axing stamp duty from UK shares held in stocks and shares ISAs. What could it mean for your portfolio?
-
Family investment companies explained: how the ultra wealthy shield their money from the taxmanWealthy families are increasingly turning to family investment companies to keep more of their money away from HMRC – but what are these arrangements and how do they work?
