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Where will Brent go next?


Graham Osborn
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What more incendiary topic can one choose?  I had a view last year that we would see support in the 40-50 range based on marginal production cost.  I was clearly dead wrong :) Since then I've been looking for secular patterns to help explain what is going on and when we should expect the bear market to end.  As many of you know I think the next few years will contain an analogue to 1974 (see the Dalio thread), and if that were true that would mean a bull market in commodities probably in the next 5 years.  Basically right now I think:

 

1. A substantive bull market in Brent will not begin until we have had a substantive bear market in financial assets.

 

2. A good time to buy (as a secular bull) will be when the SSE shows good support.

 

I look forward to a good thrashing..

 

P.S.  To address the elephant in the room - obviously I'm looking at the 2007-2010 range as more of a blip in a secular bear market in commodities after the great 2002-2007 commodities bull market following the tech bubble bursting in 2000-2001. 

 

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