Confidence returns to oil

Investors are confident of gaining returns from backing oil, according to new research.

Figures from Barclays Stockbrokers suggest that 62 per cent of investors would choose oil based on a belief that the commodity will increase in price.

A further 13 per cent say portfolio diversification is the key reason for investing in oil, while six per cent hope to purchase oil-based products to stave off the impact of inflation.

Barbara-Ann King, head of investment at Barclays Stockbrokers, said that the global importance of oil places it on a level with gold.

’When it comes to commodities, oil remains one of the most sought after substances in the world,’ she said.

’Like gold, oil traditionally has a low correlation with equities, meaning oil-related investments in a portfolio can provide a healthy element of diversification,’ the expert added. ’Similarly, oil and companies linked to oil have a history of outperforming most equity benchmarks during downturns when stock markets are perceived as being weak.’

At the end of last week (May 8th) oil prices had risen to $58 a barrel, with the commodity up 70 per cent from the lows noted in February.
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