Oil Prices Tied to Macro Growth

| Multi Asset

When analysing the beta of oil prices to our Growth Nowcasters for the US, Europe and China, we can draw two important conclusions. First, over the period 2009-2021, China is the economic zone to which oil prices have the highest beta. Secondly, if the relative importance of the Eurozone and the US seemed to have decreased between 2009 and 2016, this is no longer the case. The Eurozone takes second place in terms of oil price beta, and while the US is last, it remains a zone likely to exert pressure on the price per barrel.

This ranking blends quite well with the relative levels of our Nowcasters: our Chinese indicator is positive (+0.20 standard deviations), our US indicator is at zero standard deviations while our indicator for the Eurozone is marginally negative (-0.20). The strong Chinese macro picture suggests that the future direction of oil prices is up and not down.


Oil Prices Tied to Macro Growth
Source: Bloomberg, Unigestion. Data as at 26 February 2021.

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