For my last column of 2013, I’ll give a few predictions for the energy markets for 2014 and one in particular where I am almost alone among the energy analysts out there: Oil will see significantly higher prices in 2014 than in 2013.
Most analysts I read see the fundamental picture in oil from a US-centric point of view; that is, an increasingly strong production trend from the oil shale plays here in the US from the Bakken, Eagle Ford and newly developing Permian basin and couple that with an increasing efficiency and demand slackening here in the US which has led them to predict subsequently lower prices. I don’t think they could be more wrong.
Forget for the moment the financial metamorphosis taking place in oil trade, moving it decidedly from the control of investment banks and single-manager fund operators to the megalopolis state-supported and unregulated oil firms like Rosneft and the dominating trade companies like Glencore – this trend is worrying for a number of reasons and will almost certainly impact the global price of oil upwards – but perhaps that subject is better saved for another column.
Instead let’s look fundamentally – geopolitically – at the global oil picture for the near future and you cannot help but see nothing but risks on oil price to the upside.
Sure, the US is generating a new and amazing supply of high quality, low-sulfur crude oil - but even best scenario estimates…