The oil market is “coming back to reality”, Eugen Weinberg of Commerzbank told Joe Wallace in The Wall Street Journal. US oil futures fell below zero in April after lockdowns laid waste to global oil demand. Brent Crude hit an 18-year low that month at a little over $19 a barrel, but then rallied 135% through the end of August to top $45 a barrel. Yet that rally has now come unstuck, with Brent falling back by 12% so far this month to hit a two-month low earlier this week.
American petrol demand has flatlined at around 85% of pre-pandemic levels, dashing hopes of a return to normal, says Julian Lee on Bloomberg. Chinese demand is more robust, but the country accumulated vast stockpiles of fuel when prices plunged earlier in the year.
With Opec, the oil exporters’ cartel, and Russia also slowly easing back on oil production curbs, spare capacity is “rife”. Oil prices are facing a “chill autumn wind”.
Subscribe to 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 oil market’s bounceback was always a fragile one, says James O’Rourke of Capital Economics. Global demand appears unlikely to regain its pre-pandemic levels until 2022 and “vast oil stocks” – accumulated not only in China but also in many other countries – will weigh on the market throughout next year.
Oil bulls may have to wait until the tail end of 2021 before they can hope for higher prices, and then only if Opec and Russia manage to keep some production curbs in place.
-
Rents rise at slowest pace for four years – is buy-to-let still worth it?Slowing rental growth and higher property taxes are creating a headache for landlords. Does buy-to-let still offer a good yield?
-
Should you bag a bargain with a half-price investment trust?Twenty-six investment trusts look cheap by historic standards, with some trading at a discount of more than 50%. Are they a bargain or value trap?
-
Who’s driving Tesla?As Elon Musk steps back from government with his eyes on the stars, investors ask if he’s still behind the wheel at his electric-car maker.
-
Investment opportunities in the world of Coca-ColaThere is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throneGreg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
-
'As AGMs go digital, firms must offer a new form of scrutiny for shareholders'Opinion Technology has rendered big AGM meet-ups obsolete, but the board still needs to be held to account, says Matthew Lynn
