Jim O’Neill Says Oil To Make Comeback

Oil has been dealt a massive blow in recent months, but Jim O’Neill, former chairman of Goldman Sachs Asset Management, predicts prices will end higher this year.

Brent oil, which started the year at $58 per barrel, fell below $50 on Wednesday for the first time since May 2009. The international benchmark traded around the $51.40 level on Thursday. Meanwhile, the U.S. benchmark, West Texas Intermediate (WTI), began the year at $55 per barrel and last traded around $49.20.

O’Neill’s projection of higher oil prices by year-end is based on the five-year forward price of oil, or the amount paid for guaranteed delivery of oil five years from now.

“In my ongoing quest to become better at forecasting, I began, a few years ago, to pay attention to the five-year forward oil price as it compares to the Brent crude oil spot price, the price of a barrel of oil today,” O’Neill, famous for coining the acronym BRIC (Brazil, Russia, India, and China), wrote in a post on Project Syndicate’s website on Wednesday. He is currently a visiting research fellow at Brussels-based economic think tank Bruegel.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza