How rising oil prices could prick the US stockmarket bubble

Even with the coronavirus resurgent and much of the world going back into lockdown, the oil price is rising. That could deal a serious blow to the US stockmarket’s bull run. John Stepek explains why.

US oil refinery
A rising oil price could drive inflation – and interest rates – higher
(Image credit: © DAVID MCNEW/AFP via Getty Images)

We've spent the first week of the New Year with much of the world entering new lockdowns. For many, the excitement at leaving the dreaded 2020 behind has been replaced with a realisation that 2021 is simply 2020, but older.

Anyway, with that relentlessly cheery thought in mind, here's a puzzle for Friday: if lockdowns are going on for longer than expected, why is the oil price higher?

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.