Brent crude below $40

The barrel of Brent is trading below the level reached in the midst of the financial crisis, and -75% from its peak. We have moved from talking about “Peak Oil” to the “Oil Glut” in a mere few years. If oil price is a leading indicator of the economy, we should be heading to a massive economic slowdown, as current prices are close to those reached during the financial crisis’ climax. If on the contrary low prices are caused by excess supply (Fracking, Iran, etc.), they should be welcome (after all oil is just a production input).

Two alternative factors could be playing a role; first we might be witnessing the end of the OPEC as a cartel, as production quotas have been totally abandoned by its most influential member, Saudi Arabia. Second, producers may be reckoning that the “Carbon Transition” may take fewer years than initially expected, and hence try to pump as much of their oil as they can, before the latter turns to be a stranded asset.

 

* This document is for information purposes only and does not constitute, and may not be construed as, a recommendation, offer or solicitation to buy or sell any securities and/or assets mentioned herein. Nor may the information contained herein be considered as definitive, because it is subject to unforeseeable changes and amendments.

Past performance does not guarantee future performance, and none of the information is intended to suggest that any of the returns set forth herein will be obtained in the future.

The fact that MWM can provide information regarding the status, development, evaluation, etc. in relation to markets or specific assets cannot be construed as a commitment or guarantee of performance; and MWM does not assume any liability for the performance of these assets or markets.

Data on investment stocks, their yields and other characteristics are based on or derived from information from reliable sources, which are generally available to the general public, and do not represent a commitment, warranty or liability of MWM.

 

 

* This document is for information purposes only and does not constitute, and may not be construed as, a recommendation, offer or solicitation to buy or sell any securities and/or assets mentioned herein. Nor may the information contained herein be considered as definitive, because it is subject to unforeseeable changes and amendments.

Past performance does not guarantee future performance, and none of the information is intended to suggest that any of the returns set forth herein will be obtained in the future.

The fact that BCM can provide information regarding the status, development, evaluation, etc. in relation to markets or specific assets cannot be construed as a commitment or guarantee of performance; and BCM does not assume any liability for the performance of these assets or markets.

Data on investment stocks, their yields and other characteristics are based on or derived from information from reliable sources, which are generally available to the general public, and do not represent a commitment, warranty or liability of BCM.

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