6th January 2022
Bite-sized business news from the UK and beyond
Good morning It felt like we all knows someone who had Covid over the holidays and that’s not too far from the truth. Official figures showed that an estimated 3.7m Brits were infected in the last week of December. This represents one in 15 people in England, one in 20 people in Scotland and Wales and one in 10 in London.
- Oil producers plan supply boost
- Is Bitcoin the new gold?
Oil producers plan supply boost
What’s going on?
The world’s major oil producers agreed to pump up their output from next month in a show of confidence that Omicron won’t derail the global economy.
Why is this important?
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is a cartel of 13 countries and their allies that regulate around a third of the world's total oil production and is led by Saudi Arabia.
The group meet throughout the year to decide how much oil to produce in order to control oil prices. During the pandemic it had agreed to curb production levels (when demand was low) to support the price.
On Tuesday the group met and decided to add 400,000 barrels per day of supply in February, as it has done for each month since August.
The emergence of Omicron had raised concerns that lockdown could be reintroduced, dampening economic activity. And although some restrictions have been put in place, reports that Omicron is milder than previous variants has given OPEC+ the belief that the current wave will be short-lived and so global oil demand should increase.
And investors agreed OPEC+’s show of confidence. Oil prices edging up by 1.3% on the news and airline stocks, which would have been heavily impacted by a slowdown, all rose in value.
OPEC+’s plans to increase output was met with scepticism from some analysts who forecast that members including Nigeria, Angola and Libya will find it hard to increase production which could add more pressure to oil prices.
Is Bitcoin the new gold?
No, cryptocurrency won't be replacing gold as jewellery but Bitcoin could overtake gold as investors’ preferred asset for storing value, that’s according to a new report from Goldman Sachs.
The term "store of value" describes assets which can maintain their worth over time and typically refers to precious metals like gold or currencies like the US dollar.
Bitcoin is the world’s biggest cryptocurrency and trading in it has exploded in recent years. Its price hit an all-time high of almost $69,000 in November and has surged more than 4,700% since 2016.
There’s around $2.6tn of gold held in investments compared to $700bn in Bitcoin which makes up 20% of the store of value market.
Goldman believes that as Bitcoin becomes more widely adopted it will take market share away from gold and could reach as high as $100,000 in the next five years from $46,000 this week.
The price of bitcoin jumped 60% last year but with plenty of swings in between off the back of Elon Musk tweets and Chinese government crackdowns. It’s this volatility that critics think makes Bitcoin more of a risky asset than a safe haven.
Stat of the day
1 in 5 UK adults use a buy-now-pay-later service at least once a month
Other stories to keep you in the loop
- Pre-departure Covid tests and travel isolation scrapped in England
- Shoppers return to supermarkets for festive feasts
- Facebook owner Meta seeks to appeal UK ruling on Giphy
- Rightmove reports busiest ever Christmas for home movers
- Local authority-backed Together Energy latest to face collapse
- Airbnb hides guest names in the US to tackle racism
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