As one of the cheapest sectors in the MSCI World index, energy could be ripe for a re-rating and may merit a closer look for global equity investors. Will Riley, co-manager of the Guinness Global Energy fund, explains why the supercycle for commodities is not over yet.
Emerging economy oil demand versus non-OPEC supply growth The global oil market is relatively balanced. Under the surface, emerging economy demand is growing powerfully, driven by accelerating demand for motor vehicles as four billion people move into the $5,000–$25,000 GDP per capita range. Emerging economy oil demand should grow each year at 1.2 to two million barrels/day, offset by marginal OECD demand decline. The overall picture is additional demand of 13 million barrels/day by 2022 (versus 90 million barrels/day today). There is an impression that shale oil will meet this demand ...
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