Voir la version complète : Oil: From Bubble to Bust...and Back Again?

16/12/2008, 22h25
A blind monkey throwing darts would beat the average investment bank oil analyst, whether forecasting weekly inventory levels or the future oil price. At the peak of the historic investment bubble in oil futures back in July, they were falling over themselves to predict $170-200 oil in 2009. Now it's $25. Everyone from central bankers to the CFTC and leading economists (or 'misleading' economists as people like Paul Krugman should be labelled) claimed the price was based on fundamentals. They were wrong then, and they'll be wrong again. Back in May in It's the Oil Price Stupid, But for How Long More? (and right through the July peak) I was resolutely contrarian and wrote:
'Far from worrying about $200 a barrel oil in the foreseeable future, I would stress test my portfolio for sub $100 oil, which is far more likely from these levels. At a time when maybe 50m barrels of oil is simply parked in supertankers offshore with no takers, Peak Oil is not at hand but peak speculation in oil may well be....the bubble in oil now exceeds the move in Nasdaq during the tech boom, and matches that of house prices during the credit boom at over 600%. Prices in real terms stand at a scary 3 standard deviations above the long term average; the last time oil was this extended was in 1980, and it subsequently collapsed 86% over the next 18 years.'
Markets move faster these days, and the collapse to just over $40 from $147, at least 50% below marginal production costs for new conventional capacity (let alone Canadian tar sands etc) and with markets in such steep contango that the return (ex storage costs) of holding crude for a year is about 30%, is simply unsustainable. As for alternative energy, forget it; it was uncompetitive even at $150 but the scale of subsidy required now would rapidly bankrupt the US. Back in May tankers idling offshore laden with crude was a warning of an impending oversupply led crash, now it reflects an attractive arbitrage opportunity. China has begun stockpiling crude again after a long absence from the spot market; they know a good deal when they see one. OPEC would be irrational not to leave as much oil in the ground as possible under the current price structure; even the Saudis will face a yawning budget deficit next year at these levels. The balance of risks favours the upside by a nice margin.
I would expect the forward price curve to flatten considerably, and expect early 2009 futures to bounce above $60 in coming weeks, or I'm a blind monkey. While demand destruction will cap upside to maybe $80 through 2009 (around the 200 day moving average) the slump in desperately needed investment spending, just as production in key exporters like Mexico collapses, is setting us up for an inflationary surge in energy prices when the world economy inevitably recovers post 2010. Long term production exposure via oil majors and second-tier exploration plays with proven reserves is now very attractively priced (although oil service stocks will be impacted by slumping E&P spend). Maybe Wall Street banks should start recruiting in the zoo, and pay bonuses in bananas.