Friday , February 3 2023

Oil on the rolling stock


The price of the goods is not news that is variable and unexpected. Countries dependent on natural resources depend on their own trust in a particular commodity or commodity group. The end result of a commodity price collapse is usually a problem among the producer country and its citizens. On the contrary, commodity prices are appropriate when trading at a high level for a long time. Oil prices were in the first decade of the 21st century when resource-rich countries emerged due to higher raw material prices. During this period, crude oil Brent crude oil in 2008 reached $ 144.

Over the last 10 years, the price of oil was not good. Brent crude oil has become a roller coaster since the last financial crisis, where the price of oil has dropped as oil traders are demanding a downturn in crisis fears. Since then, he reconstructed the earth in June 2014 and sold $ 115 a barrel to barrels, and at the beginning of 2016 reached a long-term low, reaching $ 30. The sharp decline in sales caused concerns about global growth and had a negative impact on global demand.

However, oil prices in the past 18 months have been positive.

Traditionally, the political issue has contributed to a drop in prices, as the US-led trade and economic sanctions against Iran have been the markets since the beginning of the year. Only in the first nine months of the year petrol prices rose by 28%.

Sanctions on Iran have a direct impact on the crude oil market, as US sanctions against Iran for purchasing crude oil from Iran. As a consequence, there is insufficient demand for Iranian oil, which means a daily drop in oil supplies. Due to these sanctions, various countries have cut or stopped buying Iranian oil. In fact, part of the rise in oil prices may be due to the fact that manufacturers can not replenish production volumes due to Iran's oil exports after the sanctions start.

However, we have witnessed in the past six weeks that the partial recovery of the price rise before the beginning of October. Despite this, sanctions against Iran took place early this week.

Different market participants believe that cheap shipping from Iran will come from other oil producers. In addition, the slowdown in economic growth is the same, as demand for oil is declining. Washington has also agreed to release several sanctions and eight countries have allowed Iran to continue buying Iranian oil. China is the largest buyer in eight countries.

The fall in oil prices is a curse for consumers and producers. It includes major oil exporters such as Nigeria, Venezuela and Russia.

In recent years, Venezuelan oil prices have a very low negative impact on political and economic influence.

Due to the country's dependence on the oil industry, the state has reduced massive public spending, which, in turn, has led to a shortage of goods and services and an impressive growth.

The country was close to civil war. Countries that are heavily dependent on floating commodity prices, such as oil prices, need to find ways to diversify their revenue streams to minimize the negative effects of crude oil prices.

Washington has agreed to release some sanctions, and eight countries have allowed Iran to continue to buy oil. China is among eight countries

It should be borne in mind that investors are always strategically exposed to commercial investment, which usually does not generate income. An investor who wants a particular commodity porpholio can invest in companies operating in this industry.

However, the listing of the listed companies directly involves a large number of risks, such as default and contractual risks. Risk can be minimized, but if the impact on the product is achieved through an investment fund or exchange trade product, it will not be reduced completely. Such investments reduce the risk of default and concentration, and may affect the portfolio of certain goods or goods.

Investors who have chosen the stock of oil that is exposed to the oil industry will own shares of companies engaged in oil exploration, processing, storage and distribution of equipment.

If the fund's value is insignificant, it may change depending on the cost of the fund, but the risk of default and concentration decreases, and the level or profit or loss does not necessarily reflect the price of oil.

If the stock portfolio is still unstable, then the volatility can be considered as at least as many asset stocks, which is related to the profits between the various classes of assets. goods and energy. Such assets provide an element of high inflation protection. In fact, the growth of inflation is still more prominent, investment in commodities represents an anti-inflation hedge.

High inflation is often not positive for stock and stock, and may be higher than commodity prices. Historical raw material price ratios are not as strong as bonds and stocks, so you can provide genuine diversification when you really need it. However, strictly speaking, the rollers' visit can not be over yet, as the political risks and growth issues the mark on oil prices.

This article was prepared by the manager and senior advisor of Jesmond Mizzi Financial Advisors Limited, Gabriel Mansouto. This article does not provide investment advice, and its content can not be explained. The company is licensed to invest in MFSA and is a member of the Malta Stock Exchange and a member of the Atlas Group. Directors or related parties, including the Company and their clients, may be interested in the securities referred to in this Article. Investors should not forget that former productivity is not targeted at future productivity, and the cost of investment is also decreasing. For more information, please contact Jesmond Mizzi Financial Advisors Limited at 2122 4410, 67, Level 3, South Street, Valletta or email [email protected]

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