UK 23:32 Thursday, 5 November 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
It’s been a shocking week for the FTSE and oil shares. The FTSE was down 2.49% on Friday alone. BP (BP.) has taken a battering too, with a fall of 3.3% and a fall of 6.1% over the previous four days. For some share writers, this might be a quirky thing to write about. But for me I actually put quite a lot of my own money into BP, so it’s more serious and real. However I certainly will not be selling any BP shares, and here’s the main reason why.
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Comments
Jane
Mark, surely the way to go for oil companies is to snap up minor oil companies which have reserves valued, at today’s and tomorrow’s near fire sale share prices, at even less (in some cases substantially less) than the Brent price itself? Much easier than having to go out and explore yourself? There may be a wave of M&A coming, perhaps?
wildrides
So you sat on your oil shares from $114 in the summer down to $61 a barrel . Did it not occur to you to sell and buy back lower down ? . The problem is that American and other producers WILL keep pumping at a loss for quite a while . They cant switch the tap off because they need to at least cover their fixed costs and hope for a recovery in price . Meanwhile OPEC are actually clandestinely pumping out more and more ( despite pretending to have a cap ) trying to break the Americans will . All the signs are it will keep going down yet .
Jonathan
I appreciate the cause for your optimism, however the world still uses a buttload of coal and the price of coal never recovered.
Tom Winnifrith
Jane
Why should the majors rush – oil juniors bearcast special on the way
T
Robert
I’ve never met anyone who could forecast the price of oil accurately. Best guess is price will rise as marginal producers close down ops and demand increases in response to price falls.
I think the best thing to do is sit on oil shares and buy retailers for the short term boost they will get from xtra disposable income.
Forty Two
Whoah there MH! I’m with Wildrides on this one. Take a look at work by Hugh Smith (oftwominds.com), where the macro implications are also well thrashed out in a series of articles called the oil-drenched black swan parts 1-4 (maybe more by now). Aside from the obvious implications of US bpd having caught up with/overtaken Saudi, the OPEC put for oil fans just ain’t working for clear political reasons. Plenty of cost curve info for US shale plays in his work that makes grim reading – hence rig closures (come back to that). My own concern is the macro impact of several peripheral countries (Venezuela etc.) as well as less peripheral, and indeed politically trigger nervous countries such as Russia having crashing trade balances and currencies and soaring bond yields. US shale corporate bond yields are not surprisingly through the roof. Take a look at stocks like Canaccord (TSE not LSE quote). As much as TW (if I may speak for him which I may probably not) and I believe Quindell will cause contagion to CG’s US business – in the form of regulatory fines, class actions and reputational damage, the stock is tanking because of Canadian shale exposure. If this turns onto a 2008 stylee drop to $40 financial contagion into banks, we have another liquidity crisis and bang goes your demand story for a period of time as the shadow bank leveraged Chinese demand goes down the black Swannee along with it and global demand for a series of other commodities. Admittedly falling rig count should at some point give us a bottom and if the global economy hasn’t been blown to shreds then at some point you are gonna get the mother of all rallies in WTI. But at what point? I certainly have no idea – and I wouldn’t touch an investment where I have no idea with yours. It’s clichéd, but we all know for a fact that markets can remain irrational longer than you can stay solvent. I personally wanna see the white of the eyes before investing, the Apaches are still far away and it’s a brave man who will take a bet on how many there are…