TradingFloor.com releases video on the effects of oil on stocks
TradingFloor.com, the home of Saxo Bank’s trading commentary, financial research and analysis, has realised a video discussing the current oil situation and what effect it is having on stocks.
With Gadaffi still holding out in Libya and the spreading of protests to Oman, the underlying concern about oil supply instability is set to continue to impact stock performance for at least the next few months. In the video Christian Tegllund Blaabjerg, Equity Strategist at Saxo Bank’s TradingFloor.com, discussed how he feels the market will be affected by the oil situation.
Christian talked about the current outlook for the equity market while there is this backdrop of concern about oil prices, supply and stability. While this is seen to pose a real issue for the equities market, Christian believes this will continue for a long time with a mixture of good and bad days. The good days will see the price of oil drop below the $100 mark, but the prices will rise above it again, which is a less desirable outcome.
However, while this looks set to continue for some time, Christian commented that the oil trading situation is not the main problem, but that it will be an underlying problem for the next few months. Due to the fact the oil situation is so well known, it is making the market nervous of what will happen to the oil supply. However, the countries that are currently involved in the unrest do not pose that big a threat to oil, and a major threat would only arise if major countries like Saudi Arabia became involved in a revolution, which Christian finds unlikely.
Additionally, Christian discussed what is on the horizon that could provide some relief from the current situation, if only temporary. The U.S. macro numbers have been a bit soft lately, but if they pick up in the same way as they did at the end of 2010 then it would show that the U.S. recovery is coming and is very strong. However, at the opposite side of the scale, southern countries in the Eurozone have not been fairing as well, as they suffer from further bad debt.
Finally, Christian talked about whether oil and gas stocks are the only winners in the current limbo market. Christian believes that benefits are also felt by oil drilling companies, oil storing companies and shipping companies who transport the oil, as these all benefiting from the higher oil prices.
Groups who are not experiencing benefits from the situation are airlines, who are quite dependant on the oil prices, and car manufacturers, as petrol is less affordable if the prices continue to rise.
TradingFloor.com’s diverse contributors who range from macroeconomists to trading advisors, all strive to deliver insightful, enlightened commentary on trading in the financial markets - particularly on forex and forex trading, equities, stocks and commodities. Tradingfloor.com also publishes periodical model-based research and analysis to help longer-term traders allocate funds between and within asset classes.
TradingFloor.com’s commentary and analysis is delivered in text and video via the website, where users can watch forex videos and receive information on products such as CFDs.
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