Freitag, 1. Mai 2009

Peak Oil Revisited

On Thursday, I invested in oil again.

Not really sure myself why I did so exactly now:

None of the fundamentals have changed since I last sold a month ago. Prices are a little lower (in €-terms), and the forward curve is a little less steep. But there's still huge oversupply and no indication of demand picking up in the short run.

However, any meaningful recovery of the world economy, whenever it happens, is bound to let the oil-price explode. Supply simply cannot go far beyond 2008 production levels. Right now, world oil demand is probably 5 % or so below its 2008 peak due to the severe production drop in most energy-intensive industries. But I don't think the world economy will keep falling off a cliff. Rather, I believe it will start stabilising soon and then return to moderate growth, particularly in emerging markets. And this will mean that oil demand also stabilises and then starts to increase a bit. Once that happens, supply constraints aren't far away.

It might already happen next year. Or it might happen a bit later. But unless the world will be stuck in a really bad depression, it won't take more than 2-3 years, IMHO.

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