Yahoo Finance Oil prices post biggest rise for 12 years as global economy roars back
Oil prices have posted their biggest annual gains in 12 years after investors bet that surging omicron cases will not be enough to derail the global economic recovery.
US oil, or West Texas Intermediate, ended the year at almost $76 a barrel, up 27pc in its biggest rise since 2009 when the world was still recovering from the financial crisis.
Europe's Brent crude benchmark climbed 52pc to $78, its best performance in five years.
The jumps came as the FTSE 100 achieved its biggest one-year gain since 2016, rising 14.3pc but falling behind the global average.
Despite wobbles spurred by Covid variants and fears that central banks could rein in huge levels of monetary easing, investors continued to embrace risky assets during 2021 on hopes of rapid global growth as the threat from Covid fades away.
Prices paid for oil, a bellwether for global economic activity, have come off slightly from the peaks hit in October, following efforts to increase supply amid an energy crisis afflicting many countries.
The recovery is nonetheless remarkable after a historic crash when the crisis first hit. West Texas prices briefly made an unprecedented move below zero as demand collapsed and suppliers ran out of room to store oil, forcing them to pay traders to take it off their hands.
Gold fell 3.6pc this year in its worst performance since 2015. The precious metal is often seen as a safe haven for investment during market and economic turmoil due to its steady value, but struggled this year despite high inflation.
Stocks broadly continued to bounce back following a devastating market crash in the early months of 2020.
The FTSE 100 narrowly missed out on making its biggest gain since 2009, but has still not returned to the levels reached before the pandemic despite record highs being hit elsewhere.
It was outperformed by major Western peers - the German Dax climbed 15.7pc, France’s Cac rose 28pc and the US benchmark S&P 500 jumped 29pc.
In a longer view, the blue-chip index, which is sometimes favoured for its members’ dividend payments, rather than its growth alone, has struggled to make significant gains so far this century. It is up less than 10pc since 2000, during which time the S&P 500 has more than tripled in price.
The mid-cap FTSE 250 outperformed its heavyweight sibling, rising 14.6pc over the year. The All-Share Index, a gauge of the overall performance of London’s main market, also rose 14.6pc.
Clive Black, from broker Shore Capital, said large international investors had “undoubtedly been still wary of the UK” during the past year,
“From the Scottish referendum, to the EU referendum, to the car-crash of Theresa May’s governance, to, sadly, the buffoonery of Boris Johnson, there just have not been the conditions for British businesses to seriously commit to investment," he said.
London was not helped by a tepid set of initial public offerings during the year, including the disastrous float of food delivery group Deliveroo and troubled listing of ecommerce company The Hut Group.
However, Mr Black added that the UK may outperform rivals next year because City stocks now appear so cheap compared to those elsewhere.
