Beruflich Dokumente
Kultur Dokumente
O'Neill, Jim [IMD] Friday, February 24, 2012 2:26 PM Oil. Liquid Gold or Troublesome Irritant?
settled on using the 5-year price as a simple broad guide. The attached chart shows the path of the 5-year price alongside that of the spot price. In my judgment, the 5-year price is probably a better guide of the true underlying supply and demand forces. In this regard, the chart shows an increasing divergence between the two as contrary to the 2000-08 and immediate post 2008 meltdown, the long term price appears to have stabilized in an $80-100 per barrel range.
Given what I said at the start about my PhD, this may not be as interesting as I suggest or could be temporary, but I suspect not. It might be occurring due to some powerful reasons on both the demand and supply side of the equation. Certainly reported and anecdotal evidence is rising on both sides. Data shows that OECD oil demand actually declined in 2011 and, as I have remarked before, China is falling in love with a softer future GDP growth path as well as alternative energies (and nuclear still) as part of its latest stage of development. On the supply side, there is evidence that some alternatives are starting to come on stream. Natural gas in the United States is a particularly important example, and one that is still far from appreciated by the financial markets. Having observed the beginnings of the stabilization of the longer term price since late 2009, I find it a lot more difficult to be as bullish as many others, and indeed as I used to be for most of the last decade. (To suggest a parallel, it is not unlike being bullish for the Euro/$ above 1.50 or bearish below 1.00 if its equilibrium is close to 1.20.) It also raises the possibility that if policymakers wanted to do something to try and get the spot oil price back down, it might be easier than in previous years. Certainly if I were a policymaker, it would be something I would contemplate. Anyhow, by coincidence, I am off down to the Gulf for a few days at the weekend and I look forward to hearing views down there about the topic. The alternatives are appearing all over the place, and just as I was going to hit the send button , Anna Stupnytska pointed out an article to me suggesting that Ukraine has now found huge shale gas reserves putting them up their with Poland in terms of a major energy source. While I am on that part of the world, I had a very interesting discussion with some Georgian policymakers this week, who were telling me about their desires to become a hub economy and in the process, downplayed any particular links to commodities and commodity producing countries. Most interesting.
today creates the economic equivalent of a new Greece every 11 and weeks. One person I came across this week remarked back when I said this that perhaps China will end up being a much bigger Greece, which could possibly be ultimately true. But, as I suggested back, that isnt something worth spending endless hours thinking about. I also added that the Chinese stock market is showing growing signs of being a bit happier with life, so I would also spend some time thinking about more positive outcomes for China if I were him. There were mixed signals from the latest European economic data this week, with the flash February PMIs disappointing slightly, with the composite moving back down to 49.7, partly because of some giveback in Germany. While this was after two months of notable improvement, it was a bit disappointing. In contrast, the Belgian monthly confidence survey and the German IFO, both statistically pretty good European leading indicators, showed notable improvements. Here in the UK, the very latest CBI business survey had some rather encouraging details, and there are strengthening signs of improving exports. In addition, some leading figures in the UK retail industry are making noises about sourcing domestically for the first time in a generation.
Anyhow, I shall leave things at that for this week, and I look forward to my return from the Gulf in time to see payrolls and then a big weekend of British football . Have fun.
Jim ONeill Chairman, Goldman Sachs Asset Management.
Viewpoints are also available on our public website: www.gsam.com/jimoneill. Monthly Insights and Strategy Series are available on www.goldman360.com. If you do not have access, please contact your Goldman Sachs relationship manager. Jim ONeill is the Chairman of GSAM, which is a separate operating division and not part of the Global Investment Research (GIR) Department. The views expressed herein by Mr. ONeill do not constitute research, investment advice or trade recommendations and may not represent the views and/or opinions of GSAMs portfolio management teams and/or the GIR Department. Copyright 2012 Goldman Sachs. All rights reserved. Please visit our website for additional disclosures.