In December the average prudential balanced portfolio returned 0.57% (Nov: -0.32%). Top performer is Allan Gray (3.69%); while EMH Prescient (-2.05%) takes the bottom spot. For  the 3 month period Allan Gray, for the 5th consecutive month takes top spot, outperforming the ‘average’ by roughly 3.6%. On the other end of the scale EMH Prescient underperformed the ‘average’ by 7.3%.

So we are told the oversupply of crude oil is depressing its price – right?

It is a well-known fact that the oil price has a significant impact on global financial markets and hence also on the global investor. It is therefore important to understand what is currently happening and how this may impact markets going forward. Many commentators claim that the collapse of the oil price is due to a global oversupply.

Let us therefore look in more detail at the global supply/ demand situation as illustrated by the below graph. It reflects the 12 month average world oil demand as a ratio of the 12 month average world oil supply, as published in the latest ‘Energy Briefing’ by Yardeni Research Inc.

Clearly if this information is to be believed there is actually still an oversupply of crude up until November 2015 although clearly on a steeply declining trend. So it is probably true that the oil demand is slowing as the result of slower global economic growth. However, the global economy is still growing even if only at a slower pace - China ‘only’ at somewhere around 7% - meaning that the global oil demand should still grow and it does rather liberally as reported by Yardeni . What about oil supply which is said to be increasing? This is also not really a convincing story, if one looks at what is happening in Iraq, Syria and Libya.