Commodity Prices: Oil likely to remain costly
A picture taken on April 8, 2011 shows an employee as she examines oil on the Russian LUKOIL ice-resistant fixed platform LSP-1, built at the Astrakhansky Korabel shipyard. Some experts believe that while other commodity prices may change, oil will remain expensive.
Citi has warned the commodity supercycle is ending as the Chinese driver slows.
But one commodity that could stay expensive is oil. Citi's Kingsmill Bond offers this insight in a report on oil power in Russia:
Oil is different — We see Russia as a play on oil, and oil is different to the rest of the commodity complex thanks to the power of the OPEC cartel and the political fragility of the supply side. Unlike most other commodities, oil has many drivers outside Chinese infrastructure investment; as the only major commodity to rise in price in real terms during the twentieth century, its investment and price cycle has been quite different to that of the rest.
In fact this is one area where Chinese demand can keep growing, judging by historical growth patterns:
See Also: The 10 Largest Oil Deposits In The World >
See Also
Please follow Money Game on Twitter and Facebook.
Follow Gus Lubin on Twitter.
Ask Gus A Question >
More from our partners at Business Insider:
These 10 Corporations Control Almost Everything You Buy
Meredith Whitney: State Finances Are Still Doomed, And These Three States Are In The Most Trouble
Another Poll Of Independents Spells CATASTROPHE For Obama
Here's What Actors Are Actually Snorting, Smoking And Drinking In Films
Every day, reporters and producers at The World are hard at work bringing you human-centered news from across the globe. But we can’t do it without you. We need your support to ensure we can continue this work for another year.
Make a gift today, and you’ll help us unlock a matching gift of $67,000!