Is there linkage between oil price and funds?

Posted on 16 March 2012 by Douglas Chadwick

Oil prices have fallen in the last week. 

At the same time so has the value of many of the funds connected with oil or those invested in European Emerging markets like Russia which are very oil price dependent. 

The price of oil went up in the first place it would appear, as a result of the concerns about the embargo on Iran, and general Middle East unrest concerns. This inturn appeared to lift the prices of the funds we are discussing. Very much a seasaw effect. The fund prices go up and down on the current news about supply and demand for oil. 

Well my understanding from yesterdays meeting between Obama and Cameron is that they intend to release some of the oil reserves that each country holds. This in order to reduce the fuel costs and encourage growth in both of their economies. If this is to happen then the logic is that we can perhaps expect a further fall in the prices of these related funds.