Oil prices have hit a seven-year high amid fresh tensions in the Middle East. Houthi rebels in Yemen claimed responsibility for a drone attack on an oil storage site in Abu Dhabi that killed three people on Monday. Brent crude topped $88 a barrel on Tuesday and has risen 13% so far this year.
“The attack is another reminder of the highly complex missile and drone threat faced by the UAE and the region’s other main oil producers,” says Torbjorn Soltvedt of risk intelligence firm Verisk Maplecroft. “Over the coming weeks, we expect oil’s Middle East risk premium to come more sharply into focus.” Analysts at Goldman Sachs are now predicting that Brent crude will hit $100 a barrel in the third quarter of this year, says Matt Egan for CNN.
The bank forecasts that “oil inventories in advanced economies will sink to their lowest level since 2000” this summer. Previous price spikes have subsided after US shale producers ramped up production. However, while US shale reserves are “large and elastic”, reduced investor willingness to fund fossil fuels means it could take higher prices to bring shale supplies into play this time.
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 US is pressing Saudi Arabia and its allies in the Opec+ cartel, which accounts for around half of global oil output, to raise production, says Stanley Reed in The New York Times. The group slashed output by ten million barrels a day at the beginning of the pandemic and is only slowly restoring production.
Libya, Angola and Nigeria are undershooting their output targets because of “political turmoil, outmoded regulatory regimes” and creaking infrastructure. Saudi Arabia, which accounts for about 10% of the global market, could produce more, but Riyadh is so far ignoring Washington’s pleas for help for fear of “busting up the arrangement with other producers”.
-
Saba Capital and Boaz Weinstein respond to investment trustsAs investment trust managers and industry experts accuse Saba of self-motivated opportunism, the hedge fund responds to specific "misleading claims" and sets out its stall
-
How to find top-quality companies with growing dividendsIan Mortimer, portfolio manager of Guinness Global Equity Income Fund, shares where he would put his money for sustainable and growing dividends
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
-
Can The Gym Group pump up your portfolio?Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
-
MoneyWeek's five predictions for investors in 2025MoneyWeek's City columnist gazes into his crystal ball and sees five unexpected events in store for investors in 2025
-
How buy-and-build stocks deliver strong returnsBunzl, DCC and Diploma became successful through buy-and-build – rolling up dozens of unglamorous businesses. How does it work and what makes it successful?
-
Singapore Technologies Engineering shows strong growthSingapore Technologies Engineering offers diversification, improving profitability and income
-
Why undersea cables are under threat – and how to protect themUndersea cables power the internet and are vital to modern economies. They are now vulnerable
-
Warren Buffet invests in Domino’s – should you buy?What makes Domino's a compelling investment for Warren Buffet's Berkshire Hathaway, and should you buy the UK-listed takeaway pizza chain?
-
4Imprint makes a strong impression – should you buy?4Imprint, a specialist in marketing promotional products, is the leader in a fragmented field
