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Oil price rise? The equity markets may have the clues

Saxo Bank's Head of Equity Strategy Peter Garnry has spotted increasing evidence of equity markets anticipating an oil price rise. Brent has been falling since a peak in June and the price has dropped in 16 of the last 21 weeks. However, bids for drillers and oil exploration firms continue to form a pattern pointing to a price re-bound.

OPEC meets on November the 27th but so far the Saudis appear reluctant to tinker with production. That's because the low oil prices could, perversely, be helping Saudi Arabia by hurting many of the US shale oil producers who are almost at or even below break-even point. The Saudis appear to be taking short-term pain for long-term gain. The equity markets may be betting on the survivors of the lowest oil prices for four years.

03:48 minutes
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