🌍 Analysis of the situation on the oil and grain markets: possible development scenarios

Today we are seeing a significant decline in the price of Brent crude oil to $68 per barrel. This decline has been going on for several weeks now, and in my opinion there are several key factors behind it.

Firstly, the decline is related to global instability caused by international conflicts in a number of key regions. Major oil buyers such as India, China, Brazil and other countries actively filled their strategic reserves of raw materials due to favorable discount prices. However, as a result of these purchases, the reserves turned out to be full, and demand was weakened.

Secondly, disruption of supply chains and restructuring of the world market are also putting pressure on the price. The main buyers of grain: Iran, India and China are trying to reduce purchases due to the development of the domestic market.

I believe that this phenomenon is temporary. In the near future, demand for grains, particularly wheat, is expected to increase, as stocks will decrease and, due to the fact that the futures price is falling on the market, which is attractive to buyers. I expect this to happen in September - early October, which, in turn, will begin to contribute to the recovery of oil prices.

🔍 Conclusion: The fall in oil prices can be seen as a short-term phenomenon, and the current situation provides excellent opportunities for medium-term investments. You should not focus on short-term fluctuations. On the contrary, this is a favorable time to build an investment strategy, taking into account that the expected growth of one of the assets will lead to an automatic growth of the second asset, respectively (Chart 1 and 2 indicate this).

Taking into account the above, I am considering the possibility of forming a medium-term investment portfolio from this zone (see the chart for Brent), in the event of a deeper decline - recalibrate the portfolio and buy more assets.

Share your opinion in the comments, what do you think about the prospects for oil and grains? 💬