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.


Important Information

The information and data presented in this page may discuss general market activity or industry trends but is not intended to be relied upon as a forecast, research or investment advice. It is not a financial promotion and represents no offer, solicitation or recommendation of any kind, to invest in the strategies or in the investment vehicles it refers to. Some of the investment strategies described or alluded to herein may be construed as high risk and not readily realisable investments, which may experience substantial and sudden losses including total loss of investment.

The investment views, economic and market opinions or analysis expressed in this page present Unigestion’s judgement as at the date of publication without regard to the date on which you may access the information. There is no guarantee that these views and opinions expressed will be correct nor do they purport to be a complete description of the securities, markets and developments referred to in it. All information provided here is subject to change without notice. To the extent that this page contains statements about the future, such statements are forward-looking and subject to a number of risks and uncertainties, including, but not limited to, the impact of competitive products, market acceptance risks and other risks.

Data and graphical information herein are for information only and may have been derived from third party sources. Although we believe that the information obtained from public and third party sources to be reliable, we have not independently verified it and we therefore cannot guarantee its accuracy or completeness. As a result, no representation or warranty, expressed or implied, is or will be made by Unigestion in this respect and no responsibility or liability is or will be accepted. Unless otherwise stated, source is Unigestion.

Past performance is not a guide to future performance. All investments contain risks, including total loss for the investor.