Risk, returns & timeframes illustration
1 min read
August 17, 2022
by

Oil goes from pumped to dumped 💔

Oil has fallen more than 20% since June but what’s cooled the demand? Those cheaper bus rides? Or an ode to 1970s’ driverless days? Meanwhile, oil stocks are up. Happy days for fans of the Oracle of Omaha, Warren Buffet? 👴
Risk, returns & timeframes illustration
1 min read
August 17, 2022
by

Oil goes from pumped to dumped 💔

Oil has fallen more than 20% since June but what’s cooled the demand? Those cheaper bus rides? Or an ode to 1970s’ driverless days? Meanwhile, oil stocks are up. Happy days for fans of the Oracle of Omaha, Warren Buffet? 👴
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After months of feeling pumped at the pumps, fuel prices are finally starting to come down, and we’re not mad about it. The price of oil has been on a slippery slope downwards over the last two months. Falling more than 20% from June to around US$90 per barrel. Good thing we don’t have to apply for that second mortgage on our metaverse real estate just yet! 😬

Why’s oil gone from ‘pumped’ to ‘dumped’? Over in the US, President Joe Biden would like you to think it’s the result of divine, presidential intervention, after the White House sent a few strongly worded tweets to US oil companies and released some of its personal stash of oil reserves. 🛢️ However, experts say the bigger driver is has likely been slowing demand as world economies cool and we all start debating whether it’s a recession or not. On one hand that seems bad. But on the other hand, falling US petrol prices helped to ease the squeeze being felt on our wallets from rising inflation in July. 💸

Have energy stocks been dumped too? Hahahaha, no. In the world of cyclical commodity prices, oil prices can be notoriously volatile. This often extends to the giant companies pumping it out of the ground. However, the recent dip in oil prices hasn’t taken much of the shine off the share price of some oil major producers. Shares in Exxon Mobil (XOM) are still up almost 50% this year, while the share price of Occidental Petroleum (OXY) has more than doubled. That might be thanks to old mate Warren Buffett, who through his company Berkshire Hathaway (BRK.A, BRK.B) now owns more than 20% of the company. That’ll help ensure he has plenty of gas to fill his 2014 Cadillac next time he pulls up to the pump. ⛽

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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