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🛢️ The commodity #1: Oil

Crude oil remains one of the world’s most strategic commodities, sitting at the heart of economic, energy, and geopolitical balances. Its price directly influences production costs, inflation levels, energy company profitability, and global growth.

The two main global benchmarks are:

• Brent (North Sea), the reference price in Europe and Africa,

• WTI (West Texas Intermediate), the U.S. benchmark.

Despite ongoing energy transitions, oil remains the world’s leading energy source, accounting for roughly 30% of global energy consumption.

🌍 Current Economic Environment in the Context of the Article

🔄 Geopolitical and Trade Context

Trade discussions between the United States and China have resulted in a provisional agreement, involving a partial reduction of tariffs and the resumption of Chinese imports of U.S. soybeans. Although this rapprochement is viewed positively for global growth, the oil market remains cautious:

• The agreement has no major direct impact on oil demand,

• Geopolitical tensions and U.S. exemptions allowing China to purchase Russian oil have weakened the impact of sanctions and kept global supply high

⚙️ Supply and Demand Dynamics

• OPEC+ (Organization of the Petroleum Exporting Countries and allies, including Russia) plans a slight production increase of 137,000 barrels per day in December.

• This modest increase reinforces a sense of oversupply in the short term.

• Global demand remains subdued due to economic slowdown in China, persistent inflation, and declining energy consumption in developed economies.

💰 Price Evolution

• Brent trades around $64.8,

• WTI stands at $61.1,
  both relatively low levels compared to the 2022–2023 peaks.

The market expects stable to slightly weaker prices in the short term, with potential recovery if global growth strengthens.

💡 Investment Recommendation

🎯 Summary: Hold / Accumulate – A key commodity with depressed valuation but medium-term upside potential

Oil remains a strategic asset class within diversified portfolios. Despite current downward pressure, several factors could support a gradual price recovery over the medium term.

✅ Why Maintain Exposure to Oil

• Energy Hedge and Inflation Protection
  Oil remains a leading indicator of global economic activity and a hedging asset during periods of geopolitical uncertainty.
• Fragile Supply-Demand Balance
  Production levels are tightly monitored by OPEC+, and any unexpected production cut could trigger a rapid rebound in prices.
• Chronic Underinvestment in Production
  Major oil companies have cut exploration spending since 2015, limiting future supply growth — a factor that could tighten the market in the coming years.
• Potential Global Demand Recovery in 2026
  A synchronized economic rebound (China, India, U.S.) could boost fossil fuel demand before renewables fully take over.

⚠️ Risks to Monitor

• Projected surplus in 2026 that may weigh on prices,

• Unpredictable OPEC+ policies,

• Energy transition and increasing regulatory pressure against fossil fuels.

📈 Conclusion

The recent price decline (Brent around $65) reflects short-term caution rather than a structural imbalance.
A moderate exposure to oil (through energy majors such as Shell, BP, ExxonMobil, or Brent-indexed ETFs) can offer a diversification and yield opportunity within a global portfolio.

Recommendation: Hold / Accumulate – Oil remains a medium-term strategic asset, supported by global energy demand and chronic underinvestment in supply.