22 JAN 2019 - The commodity sell-off that ended 2018 was less a reflection of deteriorating fundamentals than an unwinding of growth exuberance, says Goldman Sachs Research’s Jeff Currie, noting that commodities are roughly back where they started before “global synchronous growth” became the buzz in 2017. From here, he sees them moving higher near-term, supported by a pause in Fed rate hikes, production cuts from OPEC, a weaker dollar, and policy easing in China. But returning alongside higher spot prices is the rapid growth in US shale, with new pipeline capacity unlocking supply from the Permian Basin. That should keep a lid on longer-term prices, Currie says, re-anchoring the market around a fast-cycle, lower-cost New Oil Order.
This podcast was recorded on January 10, 2019.
All price references and market forecasts correspond to the date of this recording.
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