Barvetii - Will 2010 Bring Back $100 Oil?


by Martin Wood - Date: 2010-09-26 - Word Count: 217 Share This!

Analysts at "Barvetii" apparently stand by their assertion that the price of oil will breach the $100 a barrel level this year once the US Federal Reserve extends its quantitative easing program to include fresh bond purchases.

Responding to suggestions that the safe-haven trade the dollar appears to be benefiting from would maintain the dollar's strength, "Barvetii" analysts said "Another round of QE will almost certainly send the stock market higher. Whether or not that rally would be sustainable is largely irrelevant since many investors will simply dump their US treasury holdings to buy into the equity rally sending the dollar tumbling."

"Barvetii" analysts say that despite the slowing in China's booming economy, its appetite for crude oil would remain robust and, when combined with increasing demand from India and other developing economies, the price of oil will most likely be well supported.

The firm provides clients with exposure to the bull market in crude oil through exchange-traded funds but also offers indirect exposure through investment in the stock of small and mid-cap oil producers and explorers.

Oil majors also score highly on the firm's buy lists. The healthy dividends they pay provide a compelling reason to own the stocks but "Barvetii" also believes that an equity market correction will enable investors to gain access at more attractive valuations.

Related Tags: stocks, economy, oil, barvetii

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