Oil is the most pervasive of all the commodities (certainly in the developed world). It grabs the most news headlines, creates the most interest and is probably the most talked about both inside and outside the investment world.
This is hardly surprising when you consider that oil, and its resultant products, provides the building blocks that drive modern society. Not only does it give us the fuel that drives our cars and inflates or deflates logistical costs for just about every product we consume, but it also contributes much of the power that heats and cools our homes, or (through petrochemicals) the packaging that surrounds almost everything we eat or drink.
According to Ranken Energy, a US-based exploration company, some 6 000 products are produced from petroleum waste by- products, including: shoe polish, nail polish, perfumes, ink, crayons, golf balls, hand lotion and shaving cream.
Consequently oil price collapses, particularly when driven by over supply, are often the elixir that can help lift markets and economies (of net energy importers).
With so many far reaching implications, the team at Ashburton Investments believes that it is essential market knowledge to understand the current state of the oil price road map. In this edition of Global Perspectives we have elected, therefore, to get under the skin of these developments and explain the broader implications for the market at large and our fund managers in particular.
Richard Robinson, who runs the Global Energy Fund with Alan Le Maistre, examines how and why we are experiencing a current drop in oil prices. He takes us back in time to the 1980s, puts recent moves by the Organisation of Petroleum Exporting Countries (OPEC) into a historic perspective and then examines the medium- and long-term outlook for oil.
With so many far reaching implications, the team at Ashburton Investments believes that it is essential market knowledge to understand the current state of the oil price road map.
Paul Clark brings the conversation back to the African continent and examines how the diversity of Africa’s 54 economies is reflected in varying implications across the continent. Derry Pickford unpacks the impact of oil on the global economy, and Jonathan Schiessl and Dr Suhas Ketkar offer a similar in-depth exploration of the impact on India’s economy.
Our South African roots make a thorough examination of the oil price repercussions for this country an imperative, and John Joyce and Suvasha Kander offer a frank assessment of why the consumer celebrations have not begun here in earnest and how internal factors are, quite frankly, spoiling the party.
We will continue to monitor the fallout of the oil price fluctuations and its impact on world markets with keen interest and our Ashburton Investment experts will continue to offer insights into the unfolding developments and keep you abreast of these implications.
We trust you find this edition of Global Perspectives both interesting and informative.