Dec 15, 2022 in Inflation, Macroeconomics

Resilient against inflation: Oil

The latest inversion of the US yield curve is indicative of investors’ confidence that the Federal Reserve will succeed in taming inflation in the short term. We at Javelin Wealth Management, however, believe that the Federal Reserve has more to do, and will have to continue raising rates for some time yet, before it can declare victory.   

A sector where we see possible opportunity is the oil sector, which is due to four factors:

  1. New EU restrictions on Russian oil shipments starting from December 5th, and the potential retaliation from Russia, which could lead to a spike in oil prices; 
  2. Low oil inventories in the US; and 
  3. Geopolitical issues and domestic unrest in Iran sparking nuclear threats. 
  4. An economic recovery in China, following the dismantling of zero COVID curbs   Despite the oil price drop in recent months, oil share prices are continuing to surge, making it one of the few equity sectors that remains resilient against inflation.

At Javelin Wealth Management, we are constantly monitoring market conditions to provide clients with honest, straightforward advice, so we can deliver long-term results to achieve their wealth management goals.   

Contact us for a private consultation to get started on your wealth building journey.

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