Bill
03-09-2008, 10:35 PM
And $150 next year. I suspect he is underestimating.
This article accurately discusses the commodification of oil futures.
Yes, the big investors are moving money to oil commodities, and that increases demand for futures contracts.
But, as the article says, oil is a desireable commodity futures investment right now becuase - "The outlook for oil over the next five years is also “bullish” as producers find it hard to replenish reserves, and demand outpaces supply".
It is fundamental problems with supply and demand that make oil futures a desireable buy right now - because the easy oil of the past is almost all gone, and the rest, especially the rest controlled by non-opec nations, is going to be much harder and more expensive to find and extract.
Even if places like Iraq come fully online, it won't fully cover the shortfall from our other providers.
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=206139&version=1&template_id=48&parent_id=28
Crude oil may reach a record $130 a barrel this year because pension funds are investing more in commodities, said Pierre Andurand, the chief investment officer of BlueGold Capital Management, a hedge fund.
The outlook for oil over the next five years is also “bullish” as producers find it hard to replenish reserves, and demand outpaces supply, London-based Andurand said.
Oil companies such as ExxonMobil, Royal Dutch Shell and BP are finding it tougher to replace their findings and are drilling for harder-to-reach deposits while energy demand and crude prices surge to records.
With commodities prices surging to all-time highs, the California Public Employees’ Retirement System, the largest US pension fund, said it plans to boost investments.
“There’s a lot of index funds flowing into oil, and the world is under-invested in commodities, especially pension funds,” said Andurand, who used to trade energy derivatives in Singapore and London for Vitol Group.
“Oil is now a medium-to- long-term outlook story, and it’s bullish in terms of fundamentals of production constraints.”
Calpers, which has about $240bn in assets, agreed at a February 19 board meeting to hold between 0.5% and 3% of its assets in commodities, spokesman Clark McKinley said on February 28. The Sacramento, California-based fund last year put $450mn into commodities - its first such investment.
With crude oil trading above $100 a barrel, competition among producers to find untapped reserves has caused a worldwide shortage of rigs and crews.
“Next year, oil may rise even further to $150 a barrel,” said Andurand, whose $300mn fund has so far invested 70% in energy and 30% in agriculture and metals since February.
This article accurately discusses the commodification of oil futures.
Yes, the big investors are moving money to oil commodities, and that increases demand for futures contracts.
But, as the article says, oil is a desireable commodity futures investment right now becuase - "The outlook for oil over the next five years is also “bullish” as producers find it hard to replenish reserves, and demand outpaces supply".
It is fundamental problems with supply and demand that make oil futures a desireable buy right now - because the easy oil of the past is almost all gone, and the rest, especially the rest controlled by non-opec nations, is going to be much harder and more expensive to find and extract.
Even if places like Iraq come fully online, it won't fully cover the shortfall from our other providers.
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=206139&version=1&template_id=48&parent_id=28
Crude oil may reach a record $130 a barrel this year because pension funds are investing more in commodities, said Pierre Andurand, the chief investment officer of BlueGold Capital Management, a hedge fund.
The outlook for oil over the next five years is also “bullish” as producers find it hard to replenish reserves, and demand outpaces supply, London-based Andurand said.
Oil companies such as ExxonMobil, Royal Dutch Shell and BP are finding it tougher to replace their findings and are drilling for harder-to-reach deposits while energy demand and crude prices surge to records.
With commodities prices surging to all-time highs, the California Public Employees’ Retirement System, the largest US pension fund, said it plans to boost investments.
“There’s a lot of index funds flowing into oil, and the world is under-invested in commodities, especially pension funds,” said Andurand, who used to trade energy derivatives in Singapore and London for Vitol Group.
“Oil is now a medium-to- long-term outlook story, and it’s bullish in terms of fundamentals of production constraints.”
Calpers, which has about $240bn in assets, agreed at a February 19 board meeting to hold between 0.5% and 3% of its assets in commodities, spokesman Clark McKinley said on February 28. The Sacramento, California-based fund last year put $450mn into commodities - its first such investment.
With crude oil trading above $100 a barrel, competition among producers to find untapped reserves has caused a worldwide shortage of rigs and crews.
“Next year, oil may rise even further to $150 a barrel,” said Andurand, whose $300mn fund has so far invested 70% in energy and 30% in agriculture and metals since February.