Paul Martin’s Business Update – February 11th, 2015
It may be a waiting game.
When the price of potash dropped a couple years ago it was of interest to producers and farmers but the rest of the world pretty much ignored the development. Now that it is rebounding they’re still ignoring it. Then when the price of grain fell, it was a similar story – concern in some quarters but few ripples on the broader scene.
When the price of oil began to fall a few months ago, however, everyone noticed. And economists, analysts, politicians and commentators everywhere are offering their perspectives. One is a British economist who offers a poignant view, saying the Saudi’s determination to win the price and market share battle could well drive the price of oil below $30, something that would produce significant defaults among oil producers.
But he then quickly adds….but it will also guarantee a return to $100 oil in six years as exploration budgets have been slashed and new production will not come on stream, putting pressure on existing supplies and driving up the price.