Sunday, March 1, 2009

Mirabaud guides investors through minefields; says US$75 oil price is high enough


Dubai, March 1, 2009: At a time of extreme turbulence and dislocation, with conventional investment criteria upside-down, opportunities abound. Mirabaud & Cie, banquiers priv├ęs, the 190-year-old private Swiss bankers, joined forces with Lloyd George Management, the Far Eastern investment manager, to guide investors through the minefields that currently surround us all at an investment seminar in Muscat, Oman, today (March 1, 2009).

Mirabaud’s Head of Energy Research, Richard Savage, presented his views, honed over 20 years of experience in the oil industry and oil markets, on the outlook for the oil price going forward. The crude oil price has tumbled from an intra-day high of more than US$147 a barrel last July to less than US$45 a barrel today, as fears of supply shortages have given way to concerns over dwindling demand.

Savage feels, however, that the real driver of the oil price rally was not the intricacies of the supply-demand balance, but instead the same surfeit of liquidity that drove other asset classes to unsustainable highs; the withdrawal of that liquidity leading to the dramatic collapse.

In his view, “the market is once again being driven by fundamentals, and with inventories at near record levels and OPEC sitting on 5 million barrels of spare capacity, we do not expect a recovery anytime soon. In addition, once the price does rally, we do not see a return to a US$100+ per barrel world. We believe a US$75 per barrel oil price is high enough to incentivise all but the most expensive producers; it is high enough to encourage investment in alternative energy sources; and it is high enough to put a break on the explosive demand growth that was the catalyst for the last oil price rally.”

Other subjects raised at the conference included investment opportunities in Asia, delivered by the renowned Asian investor Robert Lloyd George, as well as the Fixed Interest and Currency markets discussed by representatives of co-sponsors Eaton Vance and Sal Oppenheim, respectively.

The keynote speaker was Dr. Marc Faber, Editor and Publisher of “The Gloom, Boom and Doom Report,” renowned for both his firm opinions and entertaining delivery.

“It is at times such as these that the experience and conservatism that comes from one of the most well established private Swiss banks stands the investor in good stead,” said Gilles Rollet, Chief Executive Officer, Mirabaud (Midddle East) Ltd. “Guided by the incisive views of these highly regarded market participants, we feel certain the seminar helped delegates see more clearly through the opaque nature of markets currently prevailing.”

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