There are growing concerns about the state of the global economy with bond markets recently under pressure, stocks declining and the dollar in demand. Macro factors, nonetheless, have been swept aside in the last few days as market players solely focused on evaluating Friday’s announcement from the Biden administration on imposing damaging sanctions on Russia and its shadow tanker fleet.
It does feel something of an oddity after last year as oil becomes the flavour for investors and stock markets lose their sheen. Weather aside, which is touched upon below, sanctions continue to fund the move higher in oil prices while similar thoughts of tariffs dog the progress of global bourses. However, it is foolhardy to embark on an entrenched view that this will continue.
The oil market is like London buses: you wait ages for one then several come along quickly. Oil was gathering strength to break out of its 4Q 2024 range in the latter part of December and the move finally arrived as January kicked off. Better yet, due to a wealth of supportive developments, it stayed above the inflection points.
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