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Luke Gromen–Oil Cartel Siding With China Can Destabilize The Petrodollar

February 25, 2019

LUKE GROMEN – OIL CARTEL SIDING WITH CHINA CAN DESTABILIZE THE PETRODOLLAR

SBTV picks the mind of Luke Gromen, founder of Forest For The Trees LLC, about an impending dollar crisis and what likely scenarios can destabilize the petrodollar in the coming years. We also asked him what his ideal monetary system would be if he got to choose it.

Discussed in this interview: 
05:08 Why a dollar crisis is coming?
12:14 US dollar still the center of the world?
13:07 Gold is wanted as a global neutral reserve asset.
14:35 Saudis’ view of the Petro-dollar
23:10 A world where oil is priced in multiple currencies
28:33 No credible reserve currency alternatives to the dollar?
31:29 Bancor: A suitable replacement for the dollar standard?
34:08 How should investors navigate the impending dollar crisis?

Global Oil Shortage Before Year’s End? Surely Not…

June 8, 2015

Global Oil Shortage Before Year’s End? Surely Not…

Now that OPEC has left its production quota unchanged, the world will continue to see a glut in supplies, right?

Some analysts aren’t so sure. Sanford C. Bernstein predicts that by the end of the year global demand will outstrip supply by an estimated 1.5 million barrels per day.

That flies in the face of a lot of separate estimates. The IEA says that oil supplies are still in excess of what the world is consuming, by some 2 million barrels per day. Even with flat supplies coming from US shale, drillers are still pumping way more oil than the world is consuming. That leaves Bernstein as an outlier when it comes to guessing which way oil markets are heading.

But there is reason to believe that Bernstein is not off the mark. While market analysts are right to closely watch the trajectory of US production levels as well as what OPEC is up to, a lot less attention is being paid to the demand side of the equation. Part of OPEC’s strategy, we must remember, is to ensure the world stays hooked on oil for the long haul. The cartel’s strategy of keeping prices low dovetails with that – low prices reduce the urgency to transition away from crude oil.

Related: Price Manipulation In The Oil Markets?

And their strategy is bearing fruit – demand is growing quickly. The IEA said in its May report that “global demand growth gained momentum in recent months.” That is certainly true in the US, where motorists are hitting the roads at levels not seen since before the financial crisis. Seduced by lower prices, gasoline consumption is at its highest level since 2007, after years of stagnation. Low gas prices are also giving a boost to SUV sales as drivers cast off their energy efficient ways at the first sign of weak prices.

 

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