Fund manager who’s been right on oil has a depressing new prediction
T. Rowe Price New Era’s Shawn Driscoll says the price for a barrel of oil could drop into the teens
By Howard Gold
MarketWatch.com
Jan 16, 2016
In November 2014, Shawn Driscoll, manager of the natural-resource-focused T. Rowe Price New Era Fund, told me he expected crude oil prices, then in the $80s-per-barrel range, to fall into the $50s within 10 years.
Ten weeks later, with crude in the $50s, I interviewed him again and he predicted crude would drop into the $30s.
This week, when oil was trading in the low $30s, I caught up with him once more. And if you’re looking for a so-called tradeable bottom in energy markets soon, you’re going to be disappointed.
Although Driscoll thinks crude oil will slip into the low- to mid-$20s within six months — at around $29.50 in late-Friday-afternoon NYMEX trading, we’re not far from that now — it ultimately could go lower as we spend the next decade digging out of a secular bear market in commodities and oil.
Why? Oil’s oversupply is profound and will last for at least two years, he said, and too many industry people still are in denial.
The oversupply, of course, stems from Saudi Arabia’s efforts to keep pumping to preserve market share from U.S. shale producers and other countries like Russia and Iran, which is chomping at the bit to free itself from international sanctions so it can pump oil again — at any price.
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