Brian Singer, head of William Blair’s Dynamic Allocation Strategies team, discussed the key factors driving steady oil prices, whether prices will rise, and if the markets should remain optimistic in a Wall Street Journal “Moneybeat” podcast.

According to Singer, oil-price volatility sparked in August 2015 when China rattled the markets with yuan devaluation. That devaluation made imports of a number of commodities, including crude oil, more expensive. It also raised concerns about the strength of the economy of one of the world’s largest consumer of commodities.

“Oil actually became a real-time proxy for world growth and … more behavioral in nature,” Singer said. “Every time there was a fear of growth it went down, and every time there was an expectation of growth it went up.”

That, Singer said, is no longer the case. World growth expectations are higher and firmer, and China is much less relevant, Supply can be put on and off the market much faster, and inventories are still relatively high and expected to remain that way for the coming quarters.

Singer thinks fair value of oil prices is close to $45, in part because the current quota isn’t as powerful as the market seems to think it is. He noted that it was set well below the current production of all of OPEC, but close to the actual production of the OPEC members that are under the quota. As a result, it is not an astounding change.

Moreover, Singer said, “since the 70s, our observation is it just takes a few months after quota is put in place for the cheating to begin, and we don’t see anything this time that will push it out too much further.”

Listen to Brian Singer’s Wall Street Journal Podcast

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

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Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

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Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

Statement of Financial Condition | NMS Rule 605 & 606 | Business Continuity Plan | UK Stewardship Code
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