Yes, I think we are in a commodities bull cycle, but it will last 5 to 7 years.
There are currently many headwinds working against oil, gas, base metals and other commodities consumption.
The only reason why the price of both Brent crude and West Texas Intermediate oil futures has not exploded to or above 180 USD as JPMorgan forecasts it will is because of the United States Dollar, USD strength towards other currencies.
Once the USD starts a midterm depreciation trend, which could happen once EUR/USD touches 0.80, I think the price of gold could go to 3000 USD and the price of oil futures could rise above 150 USD.
Actually, significantly higher commodities prices would be good for almost all countries. The industrial production both in nominal and growth terms in the USA is something like 50 % to 70 % due to shale oil and conventional oil drilling production and the associated machinery building/innovation. Also, the USA is a large producer and exporter of other commodities like wheat, corn, nuts, soft agricultural commodities, oil, gas, energy distillates etc.
Nuclear war, however, could be really bad for business, I would say! No surprises here.
No comments:
Post a Comment