Ausblick auf die steigende Ölnachfrage

The world needs to get into oil ‘rehab’, says Allianz Global Investors.

“Surprisingly, the price elasticity of demand* for oil is actually lower than for products such as alcohol or nicotine. It is somewhere between zero and -0.1 in the short term, i.e. a 10% rise in oil price leads to less than a 1% fall in consumption1. Alcohol and nicotine on the other hand vary between -0.4 and -1, i.e. a 10% rise in their price will cut demand by between 4% and 10%1.
“What’s more, oil is a depleting asset and the Organization of Petroleum Exporting Countries (OPEC) controls 40% of the world’s output of oil and acts as a cartel. Perhaps it’s time for the world to think about how it got addicted to oil, how much it is willing to pay for the oil it needs now, and the alternatives to oil it will need in the future. It’s time to think about how the world can get into oil ‘rehab’.

“In my opinion, the issue is urgent, and it’s here now. If oil demand grows as expected next year, then the world needs to start investing in new oil projects - and quickly. While OPEC’s spare oil production capacity does rise in 2009 - as OPEC, and particularly Saudi Arabia, has been investing through the credit crunch of 2008/2009 - spare oil production capacity should hold flat in 2010 versus this year. However, this assumes that oil demand in the developed world doesn’t grow from here. If it does grow, then that spare production capacity starts to erode even more quickly than forecast, and will probably hit all-time lows as soon as 2013. Meanwhile, oil consumption across the developing world continues to rise; so spare oil production capacity is bound to fall in 2011, whether or not the developed world’s consumption rises.

“The risk the world faces now is that the combination of volatile oil prices and an industry that has lead times of 3-4 years and investment horizons of 15 years, leads to further delays in the start of new oil projects. In my view, the world’s problem with oil is not so much that it hasn’t got enough oil in the ground; it’s the risk of not having enough near-term oil production. This makes it imperative to restart the investment in oil production as soon as possible because if oil companies make the same mistakes in 2010 as in 2004/2005 and delay approval of new oil projects, then oil price spikes loom large. Oil companies will most likely end up approving new oil investment projects all at the same time late in 2010 or early 2011, creating an oil service capacity crunch, double-digit oil service industry inflation (perhaps 10%-15%), cost over-runs, 1-2 year project delays, and irate resource owners. We could be just 12 months away from this cycle of desperation starting all over again.

“There is an alternative: the world has to match its growth in demand for oil with the industry’s ability to grow production of oil. This is going to be painful, but the alternative would be a repeat of oil price inflation of the years 2006 to 2008 playing out into a much more fragile global economy across the years 2012 to 2014, and that would be even more painful. It’s time to get the world into oil rehab, before the oil price does it for us.

Fact file: Allianz RCM Energy

Investment objective

The fund invests in global equity markets, primarily in the energy segment. Its investment objective is to attain capital growth over the long term.

• Fund characteristics: Energy stock fund
• Launch date: 15th September 1997
• Managed by: Chris Wheaton, RCM (UK) Ltd. RCM is the specialist global equity company of Allianz Global Investors
• Structure: Allianz RCM Energy is an open-ended unit trust organised under the laws of Germany which qualifies as an undertaking for collective investments in transferable securities (‘UCITS’) in accordance with the provisions of the European Union (‘EU’) Directive EEC/85/611 (as amended subsequently).
• Authorised for sale in: Austria, Germany, Switzerland