Home Les bulletins GEAB GEAB 122 Investments, trends and recommendations (Feb 2018)

GEAB 122

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Feb 2018

Investments, trends and recommendations (Feb 2018)

– Oil: Bottom down

– Businesses: beware of bankruptcies galore

– Businesses: beware of bankruptcies galore

– Bitcoin and cryptocurrency: everything is under control

– Precious metals, safe assets

Oil: Bottom down 

The US announcements of oil production effect (we moved overnight from the ‘explosion of production’ to ‘less than expected production’[1]) have resulted in a yo-yo price, which is fluctuating now around $60 a barrel. This is a policy which probably reflects the tension between divergent US interests: on the one hand, those who need a high price to speculate or invest in their drilling (including shale oil/gas producers who rush into the investments brought by Donald Trump’s tax measures) and those who prefer a weak rate to be able to feed a theoretically booming economy, but without financial means. For speculators, quick profit-taking is at your fingertips, but watch out for market volatility. For the moment, OPEC+ continues to tighten the screw when it comes to production[2], but its actors could get tired of this game and end up freeing the quotas or even leading to Russia’s exit, and thus to a price collapse. If our “Warnings” on Syria and/or the Red Sea fronts materialise, one might expect the prices to flare up, but our readers know our basic analysis: oil is no longer king and any price spike will move the market towards other producers (Russia, USA…), other energies (gas), even renewable energies. A slippage in the Middle East would shatter OPEC+ which is currently pulling prices up, and therefore prices might eventually collapse.

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In summary

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