Oil Spike Upends Strategies as Traders Plot Era of Costly Energy
- Lombard Odier says fears of global recession are growing
- Investors should just buy bullion, SAV Markets’ Devani says
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Surging oil prices are forcing investors to rethink their strategies to factor in the potential for a prolonged period of sky-high energy costs.
A sustained jump in crude increases the prospect of a global recession and a return to the stagflation seen in the 1970s, where inflation runs hot but there’s no underlying economic growth. Central banks will also find their options limited as rising prices crimp their ability to maintain stimulus.