Weitere ähnliche Inhalte Ähnlich wie oil outlook 2012 (20) Mehr von Infinity Business School (20) Kürzlich hochgeladen (20) oil outlook 20121. GCMI
2010
GLOBONOMICS &
SE USSI
CONTEMPORARY
MACRO-ECONOMIC
ISSUES
Oil Outlook 2012
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© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
2. GCMI
2010
GLOBONOMICS &
SE USSI
CONTEMPORARY
MACRO-ECONOMIC An Oily Political World
ISSUES
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Between 1970 and 1980 The world Faced Its First Oil Crisis As
Oil Prices Zoomed Form $4 to $40 (i.e. Tenfold increase in 10 years)
This Virtually Brought Importing economies To Bankruptcy.
It created a Huge USD Bank For The USSR and Created New Synergies
Between The Saudis and The US.
The Saudis Agreed To Flood the market with Oil To starve the Russians
of Hard Currency.
By 1985 the Price of Oil Slid Back all the way to USD 24
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
3. GCMI
2010
SE USSI
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© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
4. GCMI
2010 Oil Consumption since the last 40 years
SE USSI
Year MB/Day Annual Bn Growth Price Inflation
Consumption Barrels YoY % US/Barrel Adjusted
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(2007 Base)
1965 31.24 11.40 1.80 11.89
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1970 46.07 16.82 8.10% 1.80 9.65
1975 54.99 20.07 3.60% 11.53 44.64
1980 61.84 22.57 2.40% 36.83 93.08
1985 59.39 21.68 -0.75% 27.56 53.21
1990 66.85 24.40 2.40% 23.73 37.82
1995 69.84 25.49 0.85% 17.02 23.40
2000 76.34 27.86 1.80% 28.50 34.92
2005 83.32 30.41 1.75% 54.52 57.90
2006 84.23 30.74 0.25% 65.14 67.03
2007 85.22 31.11 0.25% 72.39 72.39
Current 86.90 31.72 0.40% 120.00 116.50
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
5. GCMI
2010
Annual Consumption CAGR summary for Oil
SE USSI
5 Year Cagr 1.83%
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8 Year Cagr 1.51%
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10 Year Cagr 1.48%
12 Year Cagr 1.67%
15 Year Cagr 1.54%
20 Year Cagr 1.56%
That implies the last 5 year CAGR is only 26 basis points higher than
he 20 year average.
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
6. GCMI
2010
I
• At these prices the OPEC cartel will continue to pump a lot of Oil to
SE USS
maintain their economies.
• Most GCC countries are now used to the annual revenues at current prices.
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• The Cartel may pump more oil as prices rise to grow their GDP.
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• Unexplored Iraq, Alaska, Outer Continental Shelf US, Santos Basin. Brazil
are likely to be add new reserves.
• Assuming Oil demand grows at 1.4 % CAGR for the next 10 years over 340
Billion barrels of Oil will be consumed.
• Compare this to known reserves of 1230 Bn Barrels and new discoveries of
170 Bn barrels.
• This is roughly 1060 Bn barrels by 2018 compared to 35 Bn barrels annual
consumption.
• Alternate Sources of energy and cost cuts will only improve this position.
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
7. GCMI
2010 • The US consumes 24 % of global Oil and imports over 60 % of its
SE USSI
requirement.
• China in comparison only consumes 10 % of Global Oil.
• India only consumes 3.5 % of Global Oil Consumption.
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• Almost all Sovereign Govt. are absorbing Oil Subsidies.
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• China and India is unlikely to have a consumption growth rate
above 7 to 8 % CAGR in 2011
• US on the other hand is likely to have a CAGR of 2.50 %.
• The rest of the World will grow at 1.50 % at best.
• This gives an average CAGR of below 3.50 % for 2010/11.
• Interestingly the Reserve to Production ratio is currently 41 years .
• This range has been maintained between 30 to 40 years since the
last 3 decades.
• Unlikely that the fossil fuels theory will play up over the next 100
years or so.
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
8. GCMI
2010
SE USSI
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• Global crisis likely to test Nations repeatedly going into 2011.
• Credit Problems In Europe Likely to tighten Spending
• Credit likely to tighten. Interest rates to remain low.
• Write-Offs In Banking In 2009 exceeded USD 1.2 Trillion.
• Slow down enveloping Japan and Europe.
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
9. GCMI
2010
SE USSI
• India and China unlikely to makeup for the combined
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Fall In US/Europe/Japan Demand.
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• Major discovery drive around the world from Russia, Brazil and India.
• Thus Fundamentally a rally in Oil Beyond $90 looks unlikely in 2011.
• However the weakness in the USD is likely to keep Oil prices firm
over the next 12 months, despite weakening of Key economies.
• A weakening USD is a key factor that will keep Commodities strong.
• Commodity Importing Economies (India) will be adversely affected in
Case Oil/Commodities shoot up. Brazil and Russia will benefit the most.
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
10. GCMI
2010
GLOBONOMICS &
SE USSI
CONTEMPORARY
MACRO-ECONOMIC
ISSUES
Oil Outlook 2013
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OIL PRICES LIKELY TO CROSS $135 IN 2013
Neeraj Batra
© 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I