, Jim Rogers Blog: December 2016

Sunday, December 18, 2016

One should own energy, as the energy reserves continue to decline worldwide

A strong outlook for crude prices may also stop the Reserve Bank of India on its tracks from cutting interest rates aggressively, as a spike in oil price has the potential to swell the inflation number quickly.

Jim Rogers says the outlook for the black gold has turned healthy in the wake of the Opec production cut as it will reduce supplies after lower exploration activity in the past few months.

Crude prices soared nearly 10 per cent on Wednesday following a deal among the Opec members to cut output by around 1.2 million barrels a day (bpd), or over 3 per cent, to 32.5 million bpd from January. 

Rogers said Iran's nod to production cut was a surprise, as it had been opposing such a deal quite a lot. "Let us see if they actually do it. We all know that Iran needs money. What they are going to figure out is whether less supply and higher prices are better for them or vice versa. I am sceptical, I have heard this many times," Rogers said. 

He, however, said the fundamentals are improving for the crude oil market. He noted that the supply is going down, exploration activity is falling and reserves worldwide are already declining.

"Nobody in the world has higher reserves now than they had three years ago, except may be the frackers. The frackers cannot make money at these prices," Rogers said.

He, however, said the fundamentals are improving for the crude oil market. He noted that the supply is going down, exploration activity is falling and reserves worldwide are already declining.

"Nobody in the world has higher reserves now than they had three years ago, except may be the frackers. The frackers cannot make money at these prices," Rogers said.

Rogers, who calls himself as a terrible trader market timer, said crude oil prices were making an attempt to hit a complicated bottom for two or three years. 

"Crude prices fluctuate up and down. They have ranged between $40 and $30 and that will probably continue for a while, more likely towards the upside than the downside. Yes, $60 a barrel is not an unusual number. It is still way down from where crude prices were just two years ago," Rogers said. 

"One should own energy, as the energy reserves continue to decline worldwide. Saudi Arabia has not had a major find in many years, nobody has. Iraq, Nigeria and Iran nobody has found oil, except frackers. The fundamentals of oil continue to improve," he pointed out.
- Source, ET

Thursday, December 15, 2016

Now, brace for some crude shocks; Jim Rogers sees oil price at $60

After demonetisation and Fed rate hike fears, brace for a crude shock now.

Crude oil prices breached the $50 a barrel level on Wednesday following the Opec deal to cap production from January. And now, commodity guru Jim Rogers says crude oil prices could soon head towards $60 a barrel level.

Remember, India's oil import bill for this financial year has been pegged at $66 billion at an average import price of $48 A barrel. India, which depends on imports to meet 80 per cent of its oil needs, will have to spend Rs 9,126 crore ($1.36 billion) more a year for every one dollar a barrel increase in crude oil.
India spent $63.96 billion on crude oil import in 2015-16, about half of the $112.7 billion outgo in the previous financial year and $143 billion in 2013-14.

On Thursday, crude prices were trading at a six-week high of $51.13 a barrel level, up 1.4 per cent over its previous close.

Fund managers and strategists on Dalal Street say should oil prices rise beyond $55-60 a barrel, it could pose a risk to India's economic growth estimates as well.
"An increase in crude oil prices could be a double-edged sword for emerging market equities, which are under pressure due to weak growth and lower fund flows from sovereign wealth funds.

We expect pressure on (India's) fiscal as well as inflation if crude crosses $55-60 a barrel level," Manishi Raychaudhuri, Asia Pacific Equity Strategist, BNP Paribas, had said earlier this year.

- Source, ET

Thursday, December 8, 2016

Jim Rogers: On Gold, All Governments Debasing Their Currency at the Same Time and More


Forget last week's sell-off in gold. Jim Rogers says it's going higher. How high? "If the U.S. dollar becomes confetti, any number you want to make up. They're printing U.S. dollars fast enough to turn them into confetti. Who knows how high gold will go as long as we have a mad man running the central bank," says Rogers. Join Greg Hunter of USAWatchdog.com as he goes One-on-One with legendary investor Jim Rogers.

- Source, USA Watchdog