GCMI                  2010                GLOBONOMICS &SE USSI                CONTEMPORARY                MACRO-ECONOMIC  ...
GCMI                  2010                GLOBONOMICS &SE USSI                CONTEMPORARY                MACRO-ECONOMIC  ...
GCMI                2010SE USSIL AB O G YE K      L   © 2010 INFINITY BUSINESS SCHOOL   GLOBAL ISSUES OF SIGNIFICANCE   Ne...
GCMI                2010     Oil Consumption since the last 40 yearsSE USSI                  Year        MB/Day   Annual B...
GCMI                 2010                    Annual Consumption CAGR summary for Oil SE USSI                              ...
GCMI                 2010      I                • At these prices the OPEC cartel will continue to pump a lot of Oil toSE ...
GCMI                2010   • The US consumes 24 % of global Oil and imports over 60 % of itsSE USSI                       ...
GCMI                2010SE USSIL AB O G YE K      L                • Global crisis likely to test Nations repeatedly going...
GCMI                 2010SE USSI         • India and China unlikely to makeup for the combinedL AB O G YE K               ...
GCMI                  2010                GLOBONOMICS &SE USSI                CONTEMPORARY                MACRO-ECONOMIC  ...
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oil outlook 2012

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Official Power point presentation by Mr Neeraj Batra ,Chairman of infinity business school and one of India's leading investment bankers.The presentation determines the future oil outlook.

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oil outlook 2012

  1. 1. GCMI 2010 GLOBONOMICS &SE USSI CONTEMPORARY MACRO-ECONOMIC ISSUES Oil Outlook 2012L AB O G YE K L © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  2. 2. GCMI 2010 GLOBONOMICS &SE USSI CONTEMPORARY MACRO-ECONOMIC An Oily Political World ISSUESL AB O G YE K L Between 1970 and 1980 The world Faced Its First Oil Crisis As Oil Prices Zoomed Form $4 to $40 (i.e. Tenfold increase in 10 years) This Virtually Brought Importing economies To Bankruptcy.  It created a Huge USD Bank For The USSR and Created New Synergies Between The Saudis and The US. The Saudis Agreed To Flood the market with Oil To starve the Russians of Hard Currency. By 1985 the Price of Oil Slid Back all the way to USD 24 © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  3. 3. GCMI 2010SE USSIL AB O G YE K L © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  4. 4. GCMI 2010 Oil Consumption since the last 40 yearsSE USSI Year MB/Day Annual Bn Growth Price Inflation Consumption Barrels YoY % US/Barrel AdjustedL AB O G YE K (2007 Base) 1965 31.24 11.40 1.80 11.89 L 1970 46.07 16.82 8.10% 1.80 9.65 1975 54.99 20.07 3.60% 11.53 44.64 1980 61.84 22.57 2.40% 36.83 93.08 1985 59.39 21.68 -0.75% 27.56 53.21 1990 66.85 24.40 2.40% 23.73 37.82 1995 69.84 25.49 0.85% 17.02 23.40 2000 76.34 27.86 1.80% 28.50 34.92 2005 83.32 30.41 1.75% 54.52 57.90 2006 84.23 30.74 0.25% 65.14 67.03 2007 85.22 31.11 0.25% 72.39 72.39 Current 86.90 31.72 0.40% 120.00 116.50 © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  5. 5. GCMI 2010 Annual Consumption CAGR summary for Oil SE USSI 5 Year Cagr 1.83% L AB O G YE K 8 Year Cagr 1.51% L 10 Year Cagr 1.48% 12 Year Cagr 1.67% 15 Year Cagr 1.54% 20 Year Cagr 1.56%That implies the last 5 year CAGR is only 26 basis points higher thanhe 20 year average. © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  6. 6. GCMI 2010 I • At these prices the OPEC cartel will continue to pump a lot of Oil toSE USS maintain their economies. • Most GCC countries are now used to the annual revenues at current prices.L AB O G YE K • The Cartel may pump more oil as prices rise to grow their GDP. L • Unexplored Iraq, Alaska, Outer Continental Shelf US, Santos Basin. Brazil are likely to be add new reserves. • Assuming Oil demand grows at 1.4 % CAGR for the next 10 years over 340 Billion barrels of Oil will be consumed. • Compare this to known reserves of 1230 Bn Barrels and new discoveries of 170 Bn barrels. • This is roughly 1060 Bn barrels by 2018 compared to 35 Bn barrels annual consumption. • Alternate Sources of energy and cost cuts will only improve this position. © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  7. 7. GCMI 2010 • The US consumes 24 % of global Oil and imports over 60 % of itsSE USSI requirement. • China in comparison only consumes 10 % of Global Oil. • India only consumes 3.5 % of Global Oil Consumption.L AB O G YE K • Almost all Sovereign Govt. are absorbing Oil Subsidies. L • China and India is unlikely to have a consumption growth rate above 7 to 8 % CAGR in 2011 • US on the other hand is likely to have a CAGR of 2.50 %. • The rest of the World will grow at 1.50 % at best. • This gives an average CAGR of below 3.50 % for 2010/11. • Interestingly the Reserve to Production ratio is currently 41 years . • This range has been maintained between 30 to 40 years since the last 3 decades. • Unlikely that the fossil fuels theory will play up over the next 100 years or so. © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  8. 8. GCMI 2010SE USSIL AB O G YE K L • Global crisis likely to test Nations repeatedly going into 2011. • Credit Problems In Europe Likely to tighten Spending • Credit likely to tighten. Interest rates to remain low. • Write-Offs In Banking In 2009 exceeded USD 1.2 Trillion. • Slow down enveloping Japan and Europe. © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  9. 9. GCMI 2010SE USSI • India and China unlikely to makeup for the combinedL AB O G YE K Fall In US/Europe/Japan Demand. L • Major discovery drive around the world from Russia, Brazil and India. • Thus Fundamentally a rally in Oil Beyond $90 looks unlikely in 2011. • However the weakness in the USD is likely to keep Oil prices firm over the next 12 months, despite weakening of Key economies. • A weakening USD is a key factor that will keep Commodities strong. • Commodity Importing Economies (India) will be adversely affected in Case Oil/Commodities shoot up. Brazil and Russia will benefit the most. © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I
  10. 10. GCMI 2010 GLOBONOMICS &SE USSI CONTEMPORARY MACRO-ECONOMIC ISSUES Oil Outlook 2013L AB O G YE K L OIL PRICES LIKELY TO CROSS $135 IN 2013 Neeraj Batra © 2010 INFINITY BUSINESS SCHOOL GLOBAL ISSUES OF SIGNIFICANCE Neeraj Batra: Term I

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