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The Big Story of the Week Encourages Me to Think the Next Bear Market is Still Some Way Off

By Malcolm Stacey | Friday 14 September 2018


Hello, Share Markers. The big story of the week has not had much publicity. It’s the fact that Brent Crude reached a new high of $80 a barrel. Not an all-time record, of course, as it has traded at $140. But it could reach $100 in my view before it begins to fall again.

The reason for the rise is that the glut of ebony nectar is drying up. Here are some factors; the world economy has been growing more strongly than analysts expected. It shows little sign of slowing down - or using less energy.

Tax cuts in the USA have diluted the fear of recession everywhere, not just the States. While those wily members of OPEC have limited supplies, though not as much other oil producing companies had hoped.

Then there is the economic melt-down in Venezuela which has disrupted its all-pervading oil industry. Together with the Americans increasing trade sanctions in Iran.

Shale production in the USA will not increase any oil glut because other factors, including those outlined above, will bring reduced reserves. And the growth of renewable energy sources in the world will not be able to stem increasing demand, especially that from emerging economies. The political uncertainties and discord which threaten our world - North Korea, Iran, Israel, Big Donald, Russia - should keep the price of crude rising. If those situations worsen, God forbid, the price will soar even more.

When my detractors say this is not the time to take a bullish view of the stock market, I refer them to the buoyant value of the ebony nectar. When the shares of oil giants rise, for reasons quite a few of us don't fully understand, so do most other shares.

And now it’s time to oil our throats in the Punter’s Return.

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