Market Update: Oil & Gas – February 2018

Volatility, Inflation and the Oil Market

After a prolonged period of low volatility on global stock markets, a marked increase in bond yields has spooked investors with the possibility of a return to an inflationary environment resulting from strong economic growth. In lockstep with falling markets, oil has retreated from recent highs. However, inflationary pressures resulting from robust growth translates into increasing oil demand, with Goldman Sachs predicting growth at +1.9 Mbpd(1) in 2018, building on a strong 2017 (+1.6 Mbpd)(2) with better then expect demand growth across US, Europe and China last year.

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