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ATCA 5000

Asymmetric Threats Contingency Alliance

Is The Oil Price Collapse A Monumental Black Swan?

Collapsing Oil Prices

Ten Key Questions:

The conditions for an oil price collapse have been there since 2013, yet when it arrived in the second half of 2014, it happened suddenly and then accelerated in momentum like a snowball rolling down the Alps.  A truly monumental black swan with many cascading consequences for geo-strategy, financial markets and the global economy.

Ten key questions discussed at a recent private lunch ATCA 5000 hosted for select chairmen and chief executives of major financial institutions, family offices and technology players:

  1. As the oil price drops 44% from its recent peak, is its fall being accelerated by the rocketing US dollar?

  2. Who benefits and who loses out? With the extra disposable income in the pocket of the consumers, where will that money go? Which asset classes will strengthen?

  3. What is the impact on oil producing countries with vulnerable budgets such as Russia, Venezuela and Nigeria amongst other OPEC members and affiliates?

  4. Is the China slow down aiding the oil price collapse and could this spill out into other commodities step by step?

  5. Will the ricocheting volatility in the global markets surrender all 2014 gains?

  6. Any port on a sunny day, and the US dollar and US treasuries in this storm given that America is the main protagonist and beneficiary of this oil price fall?

  7. Has the oil price got further to fall given the falling demand for fossil fuels and rush to pump out more oil by the mom and pop fracking operations in the US?

  8. What are the consequences of a protracted collapse in the price of oil and commodities, including on renewables, if this stretches out over the next five years?

  9. Where are the bright spots?  Are they the United States in North America, the United Kingdom in Europe, India in Asia and Brazil in Latin America?

  10. What are the end game scenarios?  Could a geo-strategic event on the world stage alter the direction of the aggregate oil price vector yet again?

[STOPS]

What are your thoughts, observations and views?  We are keen to listen and to learn.

DK Matai

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All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

 

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