Category: 3. Business

The widest gap for more than two decades has opened up between the forecasts of the three main international organisations that track the world’s crude markets, causing confusion about global oil demand.

The Paris-based International Energy Agency (IEA), the Opec group of oil producers and the US Energy Information Administration (EIA) all reported their monthly oil statistics this week. The divergence between their forecasts for oil demand in 2026 reached 1.8mn barrels of oil a day (b/d), the equivalent of France’s oil consumption and the biggest gap since 2002.

The gap has gradually widened over the past two years, raising questions about the trajectory of the world’s oil demand as countries transition to clean energy.

The oil market has been caught this year between fears of a supply crunch — stoked by US sanctions on two of Russia’s largest oil companies in October — and warnings of a longer-term glut driven by rising US shale output and an economic slowdown.

Brent crude touched $82.63 a barrel in January before resuming its downward trend, then spiked again in June after tensions flared in the Middle East. The benchmark was trading at about $64 a barrel on Friday.

The IEA is the most bearish about demand in 2026, putting it at 104.7mn b/d. Opec is the most bullish, with a forecast of 106.5mn b/d. The EIA is between the two, at 105.2mn b/d.

Traders had been puzzled by the divergence, said Tamas Varga, an analyst at PVM, an oil broker. “These quite significant differences in views caused confusion, in that traders just simply did not know who to believe, did not know which number is accurate,” he said.

He added that there had traditionally been a strong correlation between oil stock levels and prices, so if the forecasts of stock levels diverged, “you can’t really figure out what the price could be in the future”.

There are multiple possible causes for the differences in the forecasts, including a greater share of the world’s oil falling under sanctions, and a lack of visibility about how much oil is being put into strategic storage by China, amid an off-again, on-again trade war with the US.

One oil market observer, who asked not to be named, said that Iran, under US sanctions, might be trying to hide a share of its oil production, causing problems with the data, while Giovanni Staunovo, an analyst at UBS, said that since the first Trump administration, China had held back some data, concealing the true size of its stocks, making it harder “to have the full picture”.

Adding to the confusion, said Martijn Rats, an analyst at Morgan Stanley, there were now 1.13mn b/d of oil in the IEA’s model that were “unaccounted” for. These are barrels that have been produced, but do not appear to have been consumed or stored.

“Historically, nine out of 10 times when you have unaccounted oil, you see revisions to demand as more data comes out,” he said.

He noted, however, that the missing barrels had grown from 110,000 b/d in 2024 to nearly 2mn barrels in August before falling back. The IEA said the unaccounted barrels were the result of a time lag in the data, but Rats suggested that the numbers were now so large, they might be distorting the view of demand growth.

“There’s lots of conflicting data, it’s a fog, but the fog is telling you these numbers are not jiving and the underlying demand might be better than we thought,” he said.

He added that if demand growth was 200,000 b/d a year stronger than previously thought, it would have big implications for the sector.

“Then you are back to the historical trend and you are thinking very differently about the impact of the energy transition on growth. Maybe less is changing than you thought,” he said.

The IEA said that while it was confident of its forecasts, its demand figures may be subject to revision because the number of countries that regularly published data on oil supply and demand had fallen in recent years, “to the detriment of market transparency and stability”.

There was also an underlying political divide among the institutions, said David Wech, chief economist at Vortexa, an energy data company.

“There is, overall, a certain trend in terms of energy transition and related aspects of climate change . . . it’s highly likely that Opec is wanting to give a positive outlook on the market, while it is possible that the IEA is, perhaps deliberately or emotionally, more on the conservative side.”

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Private markets have been attracting increasing regulatory scrutiny, and for good reason.

It’s not just that the level of disclosures is less than what is required in public markets. Or even that valuations of private market assets are more based on models rather than public pricing, robbing regulators of market signals that could inform their work. It’s because private markets have become so big.

By value, global private assets under management came to just over $13tn in 2023, having more than doubled in size over the previous five years, according to a recent report by financial data firm Preqin. It estimated that this figure is on track to almost double again by 2030. The vast majority of these holdings are private equity assets, though the growth of private credit has been explosive. To put these numbers into perspective, Bain & Company estimates that the total assets under management in the global asset management industry for 2023 totalled $115tn.

But while the lack of data transparency makes it hard to say anything with confidence, it’s not obvious that this growth poses immediate direct risks to the banking system. Good data as to how much banks lend to private market entities in general, or even private credit firms specifically, is scarce. However, the IMF’s Global Financial Stability Report from April 2025 highlighted a Moody’s report that estimated bank exposure to private credit funds was $525bn at the end of 2023.

That $525bn sounds a lot. But global banks are huge. As Moody’s puts it, exposures are moderate with private credit loan commitments about 3.8 per cent of total loans on average in 2023. So sure, private credit managers could start making terrible loans that default but this scenario doesn’t look like it would immediately blow up the banking system — although the use of “synthetic risk transfers” which enable banks to transfer credit risk on diverse loan pools to investors (typically credit funds and asset managers) may complicate the picture.

If there is a problem, it looks more likely to crop up in the insurance sector. Private credit now accounts for more than 35 per cent of total US insurer investments and close to a quarter of UK insurer assets.

Private equity-owned insurers in particular have proved effective at improving capital efficiency — taking more risk with each dollar of capital. This could come through some combination of regulation-shopping the jurisdiction of their reinsurance operations, lending to affiliates, or engaging in wholly-owned portfolio securitisation.

It could also come from building out investment operations so they can take more substantial exposure to private credit — which can offer substantial illiquidity premia, the additional return that can come when taking on the risk of holding an asset that is not easily sold.

How risky is this? Well, the private credit holdings of insurers overwhelmingly carry investment grade credit ratings — signalling exceptionally low prospective default risk. However, it is an open question whether ratings by different credit rating agencies all deserve equal trust — especially those ratings that are issued privately without public disclosure. Colm Kelleher, chair of UBS, has accused insurers of ratings shopping, calling the phenomenon “a looming systemic risk”.

Moreover, a recent analysis from Moody’s shows that while a ninth of US life insurers’ fixed income holdings by value carry private ratings, this share jumps to more than half of their so-called Level 3 holdings. Level 3 holdings are assets that are the least liquid, hardest to value and priced using models that rely on internal assumptions. And, according to the credit rating agency, US insurers’ less-liquid private asset portfolio was skewed to lower-rated holdings at year-end 2024.

Recent high-profile company failures like First Brands and Tricolor — characterised as credit cockroaches by Jamie Dimon — provide a warning of the potential downside. The JPMorgan chief executive quipped that if you see one cockroach, there are probably more.

But given the wave of new money that has moved into loans and bonds, borrowers have been able to raise finance in both public and private markets at attractive rates. Default rates have been low — even taking into account that some financially stretched businesses have found private lenders willing to restructure their credit into cash-lite payment-in-kind loans.

Market prices suggest that there is little prospect of an economic downturn sufficient to impede debtors’ timely payment of principal and capital any time in the foreseeable future. If correct, insurers will continue to profit from their greater capital efficiency. So will ordinary people. Increased competition has pushed insurers to offer better terms for those seeking fixed or variable rate annuities for retirement income.

So tilting the scales away from resilience and towards profitability could prove to have been exactly the right thing to do for insurers. But we’ll have to see how they fare in the next credit downturn to find out.

toby.nangle@ft.com

CuriosityStream (CURI) just reported a 46% jump in revenue for the third quarter, fueled largely by explosive growth in its AI training data licensing business. The company also declared a dividend for the fourth quarter.

See our latest analysis for CuriosityStream.

CuriosityStream’s pivot into AI data licensing and the latest quarterly results have caught investors’ attention, with the share price rallying 188.6% year-to-date and a stunning 199.3% total shareholder return over the past twelve months. Momentum remains strong in the short term, which suggests the renewed growth narrative is resonating even as the company navigates evolving revenue streams.

If CuriosityStream’s transformation story intrigues you, now’s a great time to broaden your search and discover fast growing stocks with high insider ownership

With the stock’s rapid ascent this year and ambitious revenue forecasts ahead, the big question is whether CuriosityStream is still trading at a discount or if the market has already priced in all that future growth.

With CuriosityStream shares closing at $4.56 and the narrative’s fair value set at $6.17, current pricing suggests meaningful upside for those who believe in the company’s growth blueprint. Strong catalysts and forecast improvements frame an ambitious but debated valuation, driven by specific company milestones.

Surging demand for high-quality, rights-cleared video for AI training is driving a transformative new licensing revenue stream for CuriosityStream. Management cited recurring and growing partnerships with large-scale AI companies. This is establishing a durable, high-margin revenue base that is expected to fuel both top-line and earnings growth.

Read the complete narrative.

Is this growth run just getting started? The most popular narrative highlights bold assumptions for future revenue, profit margins, and share count. There’s a projection buried within that could flip expectations for years ahead. Curious what strategic shifts and industry forces are steering this bullish price target? Delve into the full narrative to see the math behind the market optimism.

Result: Fair Value of $6.17 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent subscription declines and the unpredictable nature of AI licensing revenue could easily disrupt CuriosityStream’s current growth trajectory.

Find out about the key risks to this CuriosityStream narrative.

While analysts see upside based on growth and future potential, the current price-to-sales ratio of 4x stands out. This is higher than the US Entertainment industry average of 1.7x and well above the fair ratio of 1x. Such a gap suggests investors today could be paying up for optimism, which increases the level of valuation risk if growth stalls. Does the market know something others do not, or are expectations running ahead of reality?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CuriosityStream for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 879 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you want to dig deeper or see things from your own perspective, you can put together your own CuriosityStream story in just a few minutes. Do it your way

A great starting point for your CuriosityStream research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Don’t wait on just one trend. Smart investors know opportunity loves company, so consider jumping on market shifts before the crowd does and elevate your strategy.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include CURI.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Melco Resorts & Entertainment (MLCO) released its latest quarterly earnings, showing a clear jump in both revenue and net income compared to the same period last year. The company’s improving profitability has caught investor attention.

See our latest analysis for Melco Resorts & Entertainment.

The upbeat earnings report appears to have powered strong momentum in Melco Resorts & Entertainment’s share price. The stock has climbed 11% over the past month and surged 64% so far this year. Although the five-year total shareholder return is still well below its prior highs, recent gains suggest a shift in sentiment as the company’s fundamentals improve and confidence returns.

If Melco’s sharp turnaround has you thinking bigger, now is a perfect moment to broaden your search and discover fast growing stocks with high insider ownership

Given the sharp rally and recent earnings surprise, investors are now weighing whether Melco Resorts & Entertainment remains undervalued or if the market has already factored in its future growth potential. Is there still a buying opportunity, or has optimism run ahead of reality?

At a price-to-earnings (P/E) ratio of 34x, Melco Resorts & Entertainment’s valuation is notably higher than the industry average. This makes the stock look expensive at the latest close of $9.06 despite recent growth.

The P/E ratio measures how much investors are willing to pay per dollar of company earnings. It is a widely watched indicator for hospitality companies because profits can fluctuate significantly in this sector due to shifting consumer demand and economic cycles.

While Melco’s P/E ratio is higher than the U.S. Hospitality industry average of 21.4x, it is still beneath the peer group average of 40.2x. This suggests the market is pricing in robust future earnings growth and a turnaround in profitability, but perhaps not to the same degree as its closest rivals. The fair price-to-earnings ratio is estimated at 33.3x, not far from Melco’s current multiple, which could mean future re-rating potential is limited.

Explore the SWS fair ratio for Melco Resorts & Entertainment

Result: Price-to-Earnings of 34x (OVERVALUED)

However, slower revenue growth or a sudden dip in profitability could challenge the optimism that has been driving Melco Resorts & Entertainment’s recent share price rally.

Find out about the key risks to this Melco Resorts & Entertainment narrative.

Looking beyond the price-to-earnings ratio, our DCF model estimates Melco Resorts & Entertainment’s fair value at $21.84, which is 58.5% above its current share price. This approach suggests the market may be underestimating Melco’s long-term cash flow prospects. Is the stock an overlooked opportunity?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Melco Resorts & Entertainment for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 879 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you have a different perspective or prefer digging into the numbers yourself, you can shape your own Melco Resorts & Entertainment story in just a few minutes with Do it your way.

A great starting point for your Melco Resorts & Entertainment research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Stop limiting your search and try the Simply Wall Street Screener to target opportunities in overlooked areas, smart sectors, or strong income streams before the crowd catches on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MLCO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

EQT (OM:EQT) caught investor attention after its recent market move, with shares showing moderate shifts across the month and quarter. This opens up new discussions about how EQT is currently valued in the market.

See our latest analysis for EQT.

This year, EQT’s share price showed steady progress, up 8.3% year-to-date, while its one-year total shareholder return climbed to an impressive 15.5%. Momentum has been building, which suggests renewed investor confidence as market sentiment improves.

If you’re looking to spot more companies where growth and management conviction go hand in hand, consider broadening your outlook and discover fast growing stocks with high insider ownership

Given these recent shifts, the key question remains: is EQT still undervalued enough to warrant new investment? Alternatively, has the market already factored in the company’s growth prospects, leaving little room for further upside?

With EQT’s most popular narrative estimating a fair value above the recent closing price of SEK 335, the market may be discounting stronger long-term growth potential than currently reflected. This section highlights the narrative’s core driver and invites you to explore the full valuation assumptions.

The firm’s global diversification, especially its push into fast-growing Asian markets (e.g., India, Japan) and the U.S., positions it to benefit as more capital is funneled into private assets in these regions. This supports sustained AUM growth and higher future earnings.

Read the complete narrative.

Curious about what propels EQT’s target valuation far beyond the current price? The story hinges on a massive expansion plan, ambitious margin forecasts, and bold earnings projections. Want to discover which growth bets could make or break this outlook? Unlock the full details and see the financial reasoning behind this bullish case.

Result: Fair Value of $372.65 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, slower fundraising growth or execution challenges from expansion could quickly dampen EQT’s bullish outlook if these issues are not managed successfully.

Find out about the key risks to this EQT narrative.

Looking at valuation through the lens of the price-to-earnings ratio offers a different perspective. EQT trades at 42.5x earnings, which is much higher than the Swedish industry average of 25.3x and the fair ratio of 30.9x. This steep premium suggests greater valuation risk if market expectations change. Is this optimism justified, or are investors paying too much for growth?

See what the numbers say about this price — find out in our valuation breakdown.

If you want a different perspective or prefer diving into the details yourself, you can build your own narrative in just a few minutes: Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding EQT.

Don’t let fresh opportunities pass you by. The Screener surfaces new investment angles across key sectors and trends, helping you spot the next big winner before others do.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include EQT.ST.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Tencent Holdings Ltd. (OTC:TCEHY) is among the most fantastic stocks every investor should pay attention to. In a November 7 report, Bloomberg said that sustained momentum in AI development should help the company to report strong earnings for the third quarter. Moreover, results from Tencent and its peers were expected to indicate progress and standing in the AI landscape amid the rising rivalry with the U.S.

On November 13, the company reported better-than-expected results with revenue surging 15% year-over-year to RMB 192.9 billion, and operating profit rising 19% to RMB 63.6 billion. Both of these came in ahead of the consensus of RMB 189.2 billion and RMB 58.01 billion, as per LSEG data, respectively. As was expected, investments in AI supported the topline growth with strong performance in gaming and marketing services, driven by AI-powered gaming engagement and ad targeting. Operating margin also improved by 100 basis points YoY to 33% (on IFRS basis). With strong topline growth and improved margins, EPS rose 20% to RMB 6.779.

Another development that is gaining traction amid the ongoing COP30 climate summit in Brazil is Tencent’s preparation for an alliance of carbon credit buyers. On Wednesday, November 12, Bloomberg reported that the company is in discussions with mostly Asian firms from the manufacturing, technology, and consumer sectors to create a consortium that can buy carbon credits.

Ella Wang, a senior program director at Tencent, said that the company needs to purchase spot and forward carbon credits to offset its emissions and to expedite its target to become carbon neutral. The alliance described above would create more demand. Ella further elaborated:

“We believe it would send a signal to the market and encourage more potential suppliers, especially in the Global South countries.” She also said, “Such an alliance would benefit the companies in many respects, including helping with compliance and technology adoption”.

Tencent Holdings Ltd. (OTC:TCEHY) is a leading Chinese multinational technology conglomerate specializing in internet-related services, entertainment, and artificial intelligence.

While we acknowledge the potential of TCEHY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT:  13 Best Stocks to Buy According to Citadel LLC and Goldman Sachs Defense Stocks: Top 10 Stocks to Buy.

Disclosure: None. This article is originally published at Insider Monkey.