Sustained & Rising Oil Price
Does Global Data support Demand/Supply
London, UK - 11th June 2008, 21:58 GMT
Dear ATCA Colleagues
[Please note that the views presented by individual contributors
are not necessarily representative of the views of ATCA, which is neutral.
ATCA conducts collective Socratic dialogue on global opportunities and threats.]
We are grateful to Prof Prabhu Guptara, Executive Director,
Wolfsberg (UBS), Switzerland -- writing in his personal capacity -- for
his additional query in regard to the ATCA Socratic Dialogue, "What
is the Right Price for Oil?" and we also attach the authors' response
in this regard titled, "Sustained & Rising Oil Price: Does the
Global Data support Demand/Supply Imbalance as Main Reason?" He asks:
Dear DK and Colleagues
The ATCA briefing "What is the Right Price for
Oil?" more or less starts by saying "The data presented so
far overwhelmingly appears to support a fundamental supply/demand imbalance".
However, we haven't seen relevant key figures anywhere. To my mind, the
key questions are:
In response to Prof Guptara, we present, "Sustained & Rising Oil
Price: Does the Global Data support Demand/Supply Imbalance as Main Reason?
" from the authors of the ATCA briefing, "What
is the Right Price for Oil?" They write:
Dear DK and Colleagues
There is no unified set of public authoritative data on crude oil reserves.
The IEA's 2007 "Reference Outlook" projects world primary energy
needs to grow by 55% between 2005 and 2030. In reality, this is little more
than a simple extrapolation of the historic demand curve, which they say
will be met largely by fossil fuels, predominantly from OPEC. They base
their projections inter-alia on the assumption that "the crude import
price falls back from recent highs of over USD 75 per barrel to around USD
60 (in year-2006 dollars) by 2015 and then recovers slowly, reaching USD
62 (or USD 108 in nominal terms) by 2030." The IEA argument is not
informative, as it is not supported by a bottoms-up field-by-filed analysis
on the supply side.
ATCA RAW, mIU, Hamid Hakimzadeh & Dr Harald Malmgren
The ATCA briefing was written jointly by the mi2g Intelligence
Unit (mIU); the ATCA Research and Analysis Wing (RAW) based in Canary
Wharf, London; Hamid Hakimzadeh, Hedge Fund Specialist and Global Asset
Allocation Modeller, based in Buckinghamshire, England; and Dr Harald
Malmgren, Chief Executive, Malmgren Global, based in Washington, DC.
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