In his morning note, Deutsche Bank's Jim Reid discusses the latest bear market in oil, and highlights some interesting details for oil price fans: oil is now back to levels last seen on September 16th last year and even though we’ve rallied hard since February 2016, Oil has only been lower than this for 6% (188 days) of the time since the start of 2005. That is mostly made up of 44 days in 2008/09 and 112 days in late 2015/ early 2016. So these are pretty stressed levels relative to the past decade or so.
Just as notably, Reid notes that oil has returned to levels last seen in the start of 2005 which prompted the Deutsche analyst to publish his usual monthly asset performance chart from this date to put the lethargic performance of Oil in some context over the last 12 and a half years. Keeping it in USD hedged terms only for simplicity sake, of the traditional asset classes monitored by Deutsche, the biggest winners have been the Shanghai Comp (+286%), Gold (+189%), Hang Seng (+177%), S&P 500 (+163%) and EM Equities (+160%). So while Oil is net flat it’s not stopped equity markets rallying incredibly over that time.
US and EUR credit indices have returned anywhere from +34% to +109% and DM bond markets have returned +38% to +61%. HIs conclusion:
Outside of currencies only 4 assets have fallen in the last 12 and a half years (and therefore unperformed Oil). Those include the FTSE MIB (-10%), European Banks (-34%), the Broad Commodity Index (-38%) and Greek Equities (-68%). Clearly the financial crisis and peripheral European concerns of the last decade are the big themes there.
Oil's performance in context.