This chart is not slap-bang up-to-date. The price of Brent is now around $60. I never fretted unduly about oil prices; that was the advantage of being a broker.
To digress somewhat, I read that City analysts Buy recommendations for FTSE 100 stocks lost more than 17% last year. The FTSE 100 index lost 12%. The article helpfully appended that a City analyst with about five years experience pulls in more than £100,000 a year plus bonus – though one wonders why they’d get one.
Recently, over an agreeable lunch with the BB (Boy Broker), he asked me ‘whither oil prices?’ as if I’d know! But I pulled myself together and demurred when he suggested they are likely to go back up. There is usually a catalyst that shifts oil prices. Saudi Arabia turning on the taps has caused large price falls; American ingenuity at extracting oil and gas from shale likewise.
The main reason the price recovered from its 2015 nadir below $30 was the fall in exports from Venezuela. A country that could be so prosperous has had its economy devastated by its politicians. (Quick digress; is UK in same boat?) Venezuela used to export about 2.5 million barrels/day, now less than half that. If there is regime change, by no means a certainty, there is a strong possibility there will be a resurgence in exports that will cause oil prices to fall. There are other straws in the wind. A slow-down in global economic growth will reduce demand and shale extraction is becoming more cost-efficient.
Recently I reviewed how my money box has fared versus some indices in 2018. I omitted a keystone constituent of my portfolio: investment fund McInroy & Wood. Their flagship, £697 million, Balanced fund lost just 2% which is pretty good compared to the City analysts. Victor and Tim Wood are sensible having their HQ in Haddington outside Edinburgh, away from the City noise. They have a good lifestyle and I surmise don’t pay their junior analysts £100,000 + although, if they do, they have earned it.
The BBC has been criticised for a strong Remain slant. Further evidence emerged on Sounds of the 60s on Saturday.