Wednesday 23 August 2017 The one stop source for free breaking news, expert analysis, and videos on AIM and LSE listed shares

Here's What You Might Do, as the Price of Ebony Nectar Wobbles Down

By Malcolm Stacey | Saturday 6 May 2017

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.

Hello Share Grinders. Unusually for me, I’m a little pessimistic this weekend. And the cause - a very weak oil price. This is a big disappointment, as the signs a few months ago were that the price of the ebony nectar was on the rise.

Opec had said it would reduce output to help mop up a world surplus. But some analysts are now worried that its members may not cut enough production soon enough.

Meanwhile, world output, fuelled by fracking operations in the USA, continues to rise. The current price of Brent Crude is below $50 a barrel. It was teetering around $60 not so long ago. And we all remember those even further distant days when the price of a barrel was around $120.

It’s obvious that share prices for the likes of Shell (RDSA) and BP (BP.) are going to be put under pressure. Though all oil companies are working hard to recede production costs. And, as I said a few days ago, BP remains a reasonable punt, as its juicy dividend seems pretty stable. As does Shell’s.

But it’s not just oil producers which suffer when the oil price drops. Most company share prices will be affected. Which is odd as manufacturers, just to take one example, should benefit from lower fuel prices.

Nevertheless, the fact remains that if the oil price falls, so will the Footsie. The trick therefore might to be to put a bit more dosh into firms which have nothing to do with oil. The techies, mayhap. Also, banks are among those sectors which have risen lately as the Brent value falls.

I still maintain my stance that share prices will continue to rise, possibly to the end of the year. But my confidence has been tempered by the falling oil price and I will be a bit more concentrated in my hovering over the sell button. At least for less defensive stocks. While gold mining is just one sector which seems to becoming more attractive.

And now it’s time to forget my worries at the Punter’s Return. God bless.

Filed under:

Never miss a story.

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.

More on RDSA


Comments are turned off for this article.

Site by Everywhen