HSBC Private Bank expects big hike in oil prices

Fredrik Nerbrand, head of global strategy at HSBC Private Bank, said that the current price of $50 per barrel has lots of room for growth, despite a fall in demand from developed markets.

He said the world is nearing the point of “Peak Oil”, the point when productivity reaches its maximum rate, as reserves continue to decline.

He added that recession had made it clear that “even under the most depressed economic scenarios there is a shortage of oil.”

“The economic decline witnessed over the last year has had a big impact on oil demand, falling 1.4% globally for the latest figures ending 2008. Supply over the same period remained static, leading to a period of oversupply in mid-2008 but ending the year with a deficit of 0.6 million barrels of oil produced a day as demand ticked-up again in the final quarter.”

Wealth Bulletin