🙏US and UK join forces to ease oil prices

ENERGY
US and UK join forces to ease oil prices

What’s going on?
In an attempt to combat rising energy and petrol prices, on Tuesday the US government announced the release of 50m barrels of oil – the largest-ever release of stored oil – in coordination with China, Japan, South Korea, India and the UK. 

Why is this important?

The resurgent global demand in oil and gas following lockdown has led to soaring prices which has knock on effects to the price of most goods in the economy.

For weeks, the US has been pestering OPEC+, which controls over 50% of the world’s oil supplies, to ramp up oil production. OPEC+ has refused to open up their taps, a decision that’s contributing to record-high oil and gas prices.

By releasing millions of barrels of oil the US, UK and other countries hope that prices will come down. America has a reserve of 605m barrels of crude oil and other countries have similar stockpiles that they can tap into for emergencies. 

50m barrels represent 2.5 days of US or 0.5 of global oil consumption – so not a huge amount in the grand scheme of things. The UK government will allow firms to release 1.5m barrels of oil from privately-held reserves.

OPEC+ called the move unjustified and threatened to hold back oil to negate the impact. 

Takeaway
High oil prices are turning into a political problem for politicians all over the world. But given the release is literally a drop in the ocean, it’s very unlikely that this will be enough to lower prices at the pump.

FINTECH
Investing startup sets crowdfunding record

Yesterday London-based startup Freetrade raised £8m in 24 hours – a new record on the crowdfunding platform Crowdcube.

The investing app, that allows users to trade stocks with zero commission, planned to raise £1m from customers but quickly smashed that target in the first few hours.

It’s the seventh time Freetrade has crowdfunded since launching in 2018. The latest cash injection values the business at £650m, more than double the value achieved since the last fundraise in May 2020. 

Freetrade’s mission is to make investing accessible to everyone. Rather than using middlemen, it connects directly with the London Stock Exchange, significantly reducing the costs for each transaction.

It makes money through paid-for products such as ISAs and premium membership with benefits like 3% interest on deposits and access to additional stocks.

In three years it’s gained 1.1m users and is the second-largest broker on the London Stock Exchange by number of trades. 

The new funding will be used to move into crypto trading and expand into the rest of European before Australia, Canada and Japan.

Investing for the masses is a fast-growing sector, helped by the savings built up by consumers during lockdown and the record low interest rates. During the first 12 months of the pandemic, more than 7m Brits opened investing accounts.