BlackRock expects the price of oil to $ 120 and the impact of growth

[VIZIOIRAQI]

BlackRock expects the price of oil to $ 120 and the impact of growth19/01/2011NEW YORK (Reuters) - warned one of the most successful fund managers to invest in natural resources in the world that oil prices could climb to $ 120 a barrel or more during the current year to reach the level of hampering economic growth.

Said Dan Rice, managing director of BlackRock fund of energy and resources, told Reuters he believed that the current rate of global economic growth can not continue in a world of increasingly restrictive for the supply of energy.

He told Reuters in a telephone interview, "I do not think that the world can continue to grow at this rate without the high (oil prices) to $ 120 and above." The average annual return for the Fund of BlackRock, energy and resources, 18 percent in the past ten years.

"This will curb the economy and makes the global growth falling to three percent."

He said Rice, who invests in the shares of natural resource companies, said he saw that global growth is currently at about five percent, but believed that the world is heading into a period of slowdown because of the global economy is affected by the high cost of energy and other raw materials.

It is expected that the demand for oil at a record 89.1 million barrels per day in 2011, according to the International Energy Agency. While many traders believed that OPEC has enough spare production capacity to prevent prices to 150 dollars, as happened in 2008, but that demand has risen by more than four million barrels per day since the arrival of the recession to the peak.

Rice said he feared that the lack of supplies to the global economy sliding into a downturn what happened three years ago, according to his belief.

He said the oil price at about $ 90 a barrel in the long term is perhaps the highest level that could withstand the global economy without causing a global slowdown.

http://www.akhbaar.org/wesima_articles/index-20110119-103440.html

[jphillips]

Thanks for the post VIZIO. Price of oil has always been a mitigator of growth and a great indicator of economic health. That is why the price is manipulated in such a fine-tune fashion. Unfortunately, I think we are at a major tipping point, especially with the evolution of what used to be 'third world' economies. Demand will quickly outpace the supply levels and economic health will no longer dictate the price of oil. I think current projections are north of $140/bbl.

[Frank61]

BlackRock expects the price of oil to $ 120 and the impact of growth19/01/2011NEW YORK (Reuters) - warned one of the most successful fund managers to invest in natural resources in the world that oil prices could climb to $ 120 a barrel or more during the current year to reach the level of hampering economic growth.

Said Dan Rice, managing director of BlackRock fund of energy and resources, told Reuters he believed that the current rate of global economic growth can not continue in a world of increasingly restrictive for the supply of energy.

He told Reuters in a telephone interview, "I do not think that the world can continue to grow at this rate without the high (oil prices) to $ 120 and above." The average annual return for the Fund of BlackRock, energy and resources, 18 percent in the past ten years.

"This will curb the economy and makes the global growth falling to three percent."

He said Rice, who invests in the shares of natural resource companies, said he saw that global growth is currently at about five percent, but believed that the world is heading into a period of slowdown because of the global economy is affected by the high cost of energy and other raw materials.

It is expected that the demand for oil at a record 89.1 million barrels per day in 2011, according to the International Energy Agency. While many traders believed that OPEC has enough spare production capacity to prevent prices to 150 dollars, as happened in 2008, but that demand has risen by more than four million barrels per day since the arrival of the recession to the peak.

Rice said he feared that the lack of supplies to the global economy sliding into a downturn what happened three years ago, according to his belief.

He said the oil price at about $ 90 a barrel in the long term is perhaps the highest level that could withstand the global economy without causing a global slowdown.

http://www.akhbaar.org/wesima_articles/index-20110119-103440.html

Talk about a BOOM for Iraq !!

[Freedom Biz]

BlackRock expects the price of oil to $ 120 and the impact of growth19/01/2011NEW YORK (Reuters) - warned one of the most successful fund managers to invest in natural resources in the world that oil prices could climb to $ 120 a barrel or more during the current year to reach the level of hampering economic growth.

Said Dan Rice, managing director of BlackRock fund of energy and resources, told Reuters he believed that the current rate of global economic growth can not continue in a world of increasingly restrictive for the supply of energy.

http://www.akhbaar.org/wesima_articles/index-20110119-103440.html

Thanks for the find, Vizio. This translation is much better than most of the scrambled words we normally get, but here is the English version directly from Reuters. http://www.reuters.com/article/idUSTRE70H6WO20110118

BlackRock sees oil hitting $120/bbl, stalling economy

Tue, Jan 18 2011

By David Sheppard

NEW YORK (Reuters) - Oil prices will probably soar to $120 a barrel or higher this year until they cause economic growth to stall, one of the world's most successful natural resources fund managers has warned.

Dan Rice, co-head of the $1.5 billion BlackRock Energy and Resources Fund, told Reuters he saw the current pace of global economic growth as unsustainable in a world where energy supplies are increasingly constrained.

"I don't think the world can continue to grow at this rate and not go to $120 plus," the BlackRock (BLK.N: Quote, Profile, Research, Stock Buzz) managing director told Reuters in a telephone interview. His fund has averaged annual returns of 18 percent over the last 10 years.

"That will put a brake on the economy that will drag global growth back down to 3 percent."

Rice, who invests in natural resource equities, said he saw global growth at around 5 percent currently, but thought the world is heading for a period of slower growth as high energy and other raw material costs weigh on the global economy.

Rice was managing a total of approximately $7 billion as of Monday across his portfolio of mutual funds, institutional accounts and hedge funds, according to a spokeswoman at BlackRock, the world's largest money manager.

Oil demand is set to hit a record 89.1 million barrels per day in 2011, according to the International Energy Agency. While many traders think OPEC has enough spare capacity to stop a spike back toward $150 like in 2008, demand is up more than 4 million bpd since the depths of the recession.

Rice said he fears tightening supplies could tip the world economy into a slowdown -- as he believes they did three years ago.

"2008 started out as a mild commodity price induced recession, that had slowed (global) growth from 5 percent to 2-3 percent," said Rice, 59, who joined State Street Research & Management in 1984. It merged with BlackRock in 2005.

"It only fell below 2 percent after Lehman Brothers collapsed. That put a different spin on things. I know our numbers are in the ballpark for future GDP growth. They're born of 30 years of doing this."

He said a long-term price of around $90 is probably the highest the world economy can sustain without a global slowdown.

U.S. crude oil and North Sea Brent, the two main global benchmarks, are currently trading around $92 and $98 a barrel respectively, about $13-$19 above the 2010 average as booming emerging markets stoke demand.

WHERE RICE IS INVESTING

While Rice is concerned about rising commodity prices, he said there was still value to be found for now, with most oil producer shares currently reflecting expectations of a long-term price of just $80 a barrel.

"I think (oil producer) stocks will be discounting $100 oil at some point this year and at that point I will be selling," Rice said,

In the energy sector, Rice is even more bullish on coal and natural gas producers this year, with crude producers in third place.

Rice expects both Central Appalachian coal to trade at $90 a tonne -- with most share prices currently reflecting an average of $70-$75 a tonne, while natural gas is expected to climb as high oil prices encourage fuel switching.

"At the moment most stock prices are discounting $70-$75 a tonne, but if it goes to $90 those stock prices will have doubled. If it goes to $100 they will have tripled. I'm happy with doubled."

The fund's largest holdings are in coal miners Massey Energy (MEE.N: Quote, Profile, Research, Stock Buzz) and Peabody Energy Corp (BTU.N: Quote, Profile, Research, Stock Buzz) at 5 and 4 percent respectively, with coal and gas producer CONSOL Energy (CNX.N: Quote, Profile, Research, Stock Buzz) in third, according to Morningstar.

While he remains bullish in the short to medium-term, Rice said he may choose to exit his positions if he sees prices getting back to the heady levels of mid-2008 -- when he, like many others, was burned by the subsequent crash.

"If we get to the point where stocks are discounting 5 percent GDP growth, if there are no other places to invest I would move to cash."

(Reporting by David Sheppard; Editing by David Gregorio)

I pick IQD as my cash of choice to invest in.

[PrinceAbubu]

Another posting shows that the estimated reserve of Iraqi oil is 500 BILLION barrels. If price goes up to $120 per barrel, that means their reserves are worth $60,000,000,000,000. $60 TRILLION !! My guess is that this is good evidence that they can afford to RV without any problem.

We might have higher gas prices, but for those of us with Dinar, it won't really affect our bottom line too badly..

GO RV !!

[jimmey309]

Vizio --

As usual,

a great post.

Thanks , j