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  • Writer's pictureMark Watson-Mitchell

Oil, house sales, corporate failures, fracking, potholes, and the Market

Oil At $95 And Could Be Heading To $100/$105/$110 A Barrel

As I commented at the start of the year, then again in early April, it is inevitable that the price of fuel is due to rise still further.

Saudi Arabia’s Aramco still has some big profit shortfalls to make up and by getting OPEC countries, including Russia, to cut back on production can only help to push the price per barrel back over the $100 rate very soon.

It could well go even higher as global stockpiles will be bouncing around at low levels for some months to come, certainly well into the New Year.

Petrol forecourt prices have already risen to a fair extent, but there is more to come.

That in course drives transport and energy costs ever higher, which hits everyone’s pockets – while the Government earns more fuel tax in the process.

House Sales Really Slowing Down

As for house sales – well it continues to be noted that vendors, in an effort to attract buyers, are dropping their asking prices, not once but twice or more.

Then the big problem is whether the buying chains will face predictable delays due to mortgage payment ability being questioned more deeply.

And it is reported that more than half a million homeowners will be facing Christmas with significantly higher monthly payments as current loan periods come up for renegotiation.

Corporate Failures

On a more general front it is depressing to note that corporate failures are increasing substantially, while Britain is now expected by the OECD to be the second-worst performing economy in the G20.

Fracking, Net Zero Etc

Much to my wife’s total dismay, and probably a number of readers too, I believe that we have massive energy ability still below ground, and I even agree with fracking!

The question of whether we should only be driving electric vehicles, in my view, should have been put to a public vote and not imposed by Governments who are not wary of all the facts.

Just look at how we were persuaded to switch to diesel, a policy that is now regretted.

Net zero policies taking petrol cars off the road in due course do not get my vote – but enough of the politics.

May I Ask You Something Personal?

Do you have any/many potholes?

Travelling around the country has shown to me that local councils have such differing attitudes to road repair.

In my residential area the holes can be six inches deep leaving the roads to look like the cross-section of a Malteser and causing cars swerving to miss them as well as expensive damage.

The Market Generally

It has been pleasing to see some upward activity in the Small Cap Sector, particularly as the Private Equity players pounce upon victims, especially while so many price-to-earnings remain so low and well below overall market average.

Last month I stated that I always enjoyed picking stock up in August while holidays were well underway and eyes were diverted from the screens.

It was then around FTSE 7618 and fell to 7250 within days.

Literally a month ago it was standing at 7257.80 and just a day or so ago it had rebounded to 7741.90.

The index hit 8047.10 in February, which is a level that I can easily expect to be beaten again within the next few months.

As long as you continue to buy quality, low earnings ratios, yielding and strong balance sheet stocks, you will be able to take great advantage out of this market.


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