OIL : we think the market can go slightly lower, say, toward $90 a barrel | NOURIEL ROUBINI BLOG

Saturday, August 3, 2013

OIL : we think the market can go slightly lower, say, toward $90 a barrel

What are your thoughts on other commodities?

Nouriel Roubini

Nouriel Roubini : We are concerned about base metals, because the slowdown of China may end up a hard landing, which implies that demand for things like copper and others could really sink. In the case of oil, we think the market can go slightly lower, say, toward $90 a barrel, but it’s probably not going much lower than $90, and $100 to $110 maximum; that’s the range for oil. Because demand is growing less and supply is increasing, you might have some softness in oil prices. But then there also is geopolitical risk. If there is a war between Israel and Iran, that could lead to an increase in the sale premium.
Soft commodities, especially agriculture and food, are slightly better supported and less cyclical. Emerging markets are still urbanizing and naturalizing, having high per capital income growth and having population growth with a few exceptions. Demand for food is going to rise over time.
Natural gas prices are going to go higher, as the U.S. starts exporting more. Prices are low in the U.S. and very high in the rest of the world. There’s a gap between very low U.S. prices and high global prices. That is going to be arbitraged. - in indexuniverse

Nouriel Roubini, (born March 29, 1958, Istanbul, Turkey), Turkish-born American economist and educator who was best known for predicting the 2007–08 subprime mortgage crisis in the United States and the subsequent global financial crisis.

Born to Iranian Jewish parents, Roubini moved with his family to Iran and Israel before they settled in Italy in 1962. After a year at Hebrew University of Jerusalem, he studied economics at Bocconi University in Milan (B.A., 1982) and Harvard University (Ph.D., 1988), where he specialized in macroeconomics and international economics. He joined the economics faculty at Yale University in 1988 and taught there until 1995, when he moved to New York University. He also served as a visiting scholar to the International Monetary Fund (IMF), was a research associate with the National Bureau of Economic Research (NBER), held single-year terms on the White House Council of Economic Advisers (1998–99) and at the U.S. Department of the Treasury (1999–2000), and cofounded (2004) the consulting firm Roubini Global Economics. Roubini spent much of his early career studying countries that experienced extreme economic failures, such as Mexico (in 1994), Thailand and other countries associated with the 1997 Asian financial crisis, Russia (1998), and Argentina (2000). He determined that each shared one common element: a massive current account deficit.(www.britannica.com)

Nouriel Roubini is the Chairman and CEO of Roubini Macro Associates, LLC, his own global macroeconomic consultancy firm. He is also a professor of economics at New York University’s Stern School of Business. Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.