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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

My Blog

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Where's the Oil price headed?

Posted on January 21, 2015 at 12:19 PM Comments comments ()
The Oil price started to slide from the mid $80s down to the recent $45 after Russian President Vladimir Putin said Russia would not cut the 300,000 barrels per day which the market expected.  It was the same day as the OPEC meeting in Vienna.  The Arabs must have felt compelled to go with this strategy, Sheikh Ali Al-Naimi declaring that Saudi would not cut production either.  The pronouncements of that day have left a big scar on the landscape, with the Russian economy nearly entering a period of recession.  The OPEC nations have tried to bravely weather the storm, relying on the abundant surpluses they had built up when the price was high. 

But pressures from the populations at home together with anger at the absurdity of pricing the valued commodity so cheaply, has seen the Venezuelan President Maduro trying to gather friends for his cause.  A low Oil price may be okay for a major producer like Saudi Arabia, who would be profitable even if the price dropped further, but for Iran to say they would be happy with a price of $25 per barrel is just tongue-in-cheek.  That sardonic tongue has been well interpreted, and the price has started to rally.

Even today, the words of OPEC Secretary General El-Badri speaking in Davos today, suggest the floor has been reached.  According to him, the low current oil prices may obtain for this month or so, but are likely to rebound from now on. 

With a low Oil price starting to hit shale and fracking producers in the U.S. and elsewhere, with announcement of job cuts in this industry worldwide, the Saudis must see that they are hurting their friends while they were trying to help, and it has been at a huge financial loss to themselves. 

The current oil surplus on the world markets will by common sense bring cuts in production in most countries, bar those who would continue producing more regardless in an effort to wear down their competitors and take as much market share as possible.  But certainly, on pure financial logic, why produce more to achieve a lower gross figure?  Some calculations suggest a price of $50 to $60 per barrel would be a cut off point.  Cheaper than that is just throwing away this precious commodity.
There is no sense in overproducing now and suffering shortages later.

A stable honest price will do the whole world a power of good, helping the OPEC and other oil producing nations with their revenues, and even allowing the shale and frackers to get back on stream, which will help maintain the only-recently-created jobs in that segment of the energy industry.
Choosing the golden route of stable pricing and stable supplies would be good for the whole world.

I predict this will be a golden year for global growth, as more and more nations try to fulfil the dreams of their people, and create growth and prosperity.  It is possible, if all are guided by the urge for peace and equitable exchange of resources, which God has granted to every nation.  What could be better than to win a prosperity for their people with those resources?

I am guided by a feeling that our Heavenly Father would be happiest to see all nations live in peace and prosperity.

I send you my good wishes for the New Year.

Kind regards,
Durudarshan H. Dadlani





Oil price pretty high

Posted on December 2, 2013 at 12:51 PM Comments comments ()

How is the economic Recovery likely to continue?

Posted on October 28, 2013 at 8:34 AM Comments comments ()
It has taken all of five years for the world economies to be restored to semblance of normality from the dark days of 2008.
 
Remember those days when the interest rates were quite high in the advanced economies, anything from 4 to 7 percent - and that for the benchmark European Central Bank, Federal Reserve and Bank of England rate. 
 
The crisis created by the collapse of Lehmann Bros sent shockwaves throughout the financial system worldwide, with stockmarkets tumbling, loss of confidence in trade, fall in house prices, and a mood of pessimism gripped the world. 
 
At the vortex of the crisis, when Oil price reached $147 per barrel, according to OPEC AND European Union figures, about $250 billion additional bills were imposed on the European Union's oil expenditure, and what a terrible crisis it created, making transportation and manufacturing unviable in many countries, e.g. Portugal, Spain, Greece, the extra drain sucking the life-force out of the system. 
At the peak of the crisis, people who were earlier working in the textile industry were suddenly without work, and wondering how they would find their cod-and-chips.  Enterprising young people and old were trying their hand at the e-commerce economy, and finding lot of work but little revenue.  The Prime Minister of a sovereign nation which was so prosperous not so long ago was visiting the heads of state of various nations, asking for help.  The social security systems were severally stretched, the tax revenues not corresponding to the new outflows.  The interest on the bonds became quite high, to attract investors.  Talented people from universities were not able to find opportunities to make a living. 
Demand on housing was as high as ever, but people didn't have money to rent, nor were banks willing to extend mortgages.  Indeed, banks and loan corporations were suddenly unviable, after the property price plunge and bankruptcies of many individuals. 
 
Today, comparatively, there has been a return of confidence.  Things are getting better.  Spain, Portugal and Greece have seen their bonds become more attractive to international investors.
But the worst is hardly behind us, yet the oil price remains so high.  The pending closure of the Grangemouth Refinery is an indicator of the havoc the oil price plays with the balance sheet of such businesses.  A business that was viable up until recently today stands in need of £300 million, with that it would support 800 jobs until trade is more favourable.  This may be a microcosmic illustration of what could be in store for the OPEC nations, unless they decide to reduce the oil price to a level that is affordable to the rest of the world, and would give the OPEC nations an on-going stable income on a long-term basis into the future, and allow the world to breathe, and help sustain Recovery. 
 
It took two-and-a-half years after the high oil price knocked the economies for six for a return to some kind of normal business activity.  Common sense tells me that the high price today will probably hamper growth for about a year-and-a-half, and it is already restricting growth and causing hardships in many places, e.g. Yemn, Kenya, India, and almost all the nations outside the G20. 
I WOULD RESPECTFULLY SUGGEST THAT THE OIL PRICE NEEDS TO BE BELOW $85  A BARREL.
 
That would help the hard-pressed developing nations meet their bills from their depleted reserves or devalued currencies, and enabling continuation of trade with the U.S., China, European Union, Israel and indeed OPEC, which would create a dynamic of mutual co-operation and support that may help all nations thrive and develop all their potential.  That is the missing piece of the jigsaw in the picture of a continuation of the worldwide economic Recovery. 
 
All the listening hearts of the world know what I am saying, and those who sit in positions of influence will do what is necessary, for that I pray.
 
Kind regards,
Duru-darshan.
 

Good morning, everybody.

Posted on August 14, 2013 at 5:55 AM Comments comments ()
I note my readers searching for Divine Supplements in Goodmayes.
The address is 855 High Road, Goodmayes, Ilford, IG3 9UZ, not far from Tesco, with ample car parking.
Telephone number is 0208 590 7900.  Shop is open only on Wednesdays and Saturdays, 10 am to 4 pm.
Other days by appointment. 
Mr Wilson there is one of the best masseurs, especially for Frozen Shoulder.
People over 75 years of age can get first massage free.
 
--------------------------------
Missingx.com  is a good website to track anything that passengers may have forgotten on British Airways planes.
 
--------------------------------
 
Anyone wanting to check my professional details could do well to check the volumes at public libraries,
or online, of : Marquis' Who's Who of the World (who have listed me since 1996) and
Stanford Who's Who (where I am listed since November 2011).  Look up Durudarshan H. Dadlani.
My e-mail is : [email protected]
mobile : 07505 830518
 
---------------------------------
 
Kind regards,
Duru-darshan
 
 
 
 

Oil price is far too high, despite accomodative policies

Posted on August 8, 2013 at 3:29 AM Comments comments ()
For a continuation of the worldwide economic Recovery, in my opinion the price of Oil is far too high  - both WTI and Brent, which hit parity recently and have been both in backwardation on the far futures contracts.
 
The holding of or reduction of benchmark rates in accommodative policies is brilliant, and the only way forward.  The Australian Reserve Bank, U.S. Federal Reserve and Bank of England are setting the tone for continuation of Recovery.
 
Mr Raghuram Rajan has been appointed Governor at the Reserve Bank of India, and assumed his post there on 5th September.  In his name are coded the most fond Hindu wishes in Godhead, just as they chant Raghupati Ragav Rajaram.  Hope he will set policies to utilise the various fiscal tools he has at his disposal, and help renew expansionary growth in the Indian economy.  It is noted that he is a gregarious, media-friendly personality, so presumably the world will hear more about what he has in mind. 
 
Oil price at anything above $85 per barrel is too high, and will continue to slow down the world economies.  When people are unable to feed themselves and their children in Yemen and other places, most of the developing world I would surmise, it is time for the OPEC nations to pause and consider what would be best for everybody.  Growing unemployment in South Africa (over 25 percent) and other countries, where social security is not a state policy, does not indicate a robust world picture.  It is imperative that the Oil price be reduced, for continuation of worldwide economic Recovery, which in turn will be able to sustain infrastructure growth in the OPEC and other nations. 
 
Israel with an unemployment rate of over 25 percent could do with international goodwill for their technologically advanced products, and a peace in that region can only help bring the oil price down and help the economies in that region.  In a cooling off of tensions lies the way forward to peace and prosperity.
 
Enlightened souls who help govern the policies, the duty is yours to do the needful.
 
Kind regards,
Duru-darshan.
 
 

Mixed signals about the economic picture

Posted on July 30, 2013 at 8:08 AM Comments comments ()
There seem to be mixed signals about the economy. 
 
The OPEC countries exported oil worth $1.27 Trillion last year, so that much wealth has been created for their economies and the nations who trade with them.  What is baffling is the high Oil price, which in my calculation is far too high to sustain Recovery.  Couple that with an observation made by Prince Al-waleed bin Talaal that in view of increasing shale gas production, especially in the U.S., the world is less reliant on oil from OPEC, meaning declining demand in years to come.  Most OPEC nations' infrastructure development projects would stay on line were the price per barrel no less than $85, that was according to Sheikh Al-Naimi and Sheikh Al-Badari as well as the Algerian oil minister about a year ago. 
 
The housing numbers from the U.S. on the Case-Schiller map have not been as robust as was expected; indeed, housing starts have been the slowest for 18 years.  While reduced inventory is holding up prices, there needs to be much more construction activity.
 
In the meantime, Lakshman Achuthan of the Economic Cycles Research Institute, who looks at the leading indicators, suggests he has seen figures to indicate a slow-down, which would probably show up in the real economy in another four-five months time.  Corrective measures by government and big corporations in creating jobs and a resurgence of confidence could help to avert that scenario. 
 
All humans like to eat and drink well, dress well, live in comfortable housing, have good transport, have good entertainment, read books, listen to music, watch movies, play in the park, go on holidays, and so on, and people always have aspirations that the economy - in the combined efforts of all to innovate, develop, utilize and monetize all that God has put on earth - will help them with improving standards of living.  That is what everyone wants. 
 
Good news from the U.S. is that they are creating about 150,000 or more jobs each month, and today sees the announcement by Amazon of the creation of 5,000 jobs at their HQ.
 
I suggest a lower Oil price would help Recovery regain its sure steps, for a worldwide economic Recovery.  I pray for that.
 
Kind regards,
Duru-darshan.
 
 
 

May Allah make Peace

Posted on June 22, 2013 at 1:06 PM Comments comments ()
A reader from Saudi Arabia put in the search phrase, May Allah make Peace, and found my website.
 
Indeed, the Being, the Force, the Entity we call Allah, which translates into God for the Christians and Bhagvan for the Hindus, is the only one who can inspire people to restore peace, brining peace of mind, cessation of hostilities between brethren and kindred folks, and indeed to mankind at large.
 
May Allah bring peace, and inspire man and women to appreciate the wonderful nature of God's creation, and His gift of life to each and every one, which is so precious to us all...May we understand that it is equally precious to others.
 
May Allah in His mercy inspire us to understand that He has created the world with abundance, and may it be shared by all in a fair and just way. 
 
Often people are fighting over dominance of something, a house, a piece of land, a family business or anything.  Often people have died over such things, even over leadership, only to discover later that it was in vain, not worth the fight, and that the use or ownership of the same could have been achieved with fairness and just means - if such a subject had been opened up in words, and agreements made cordially.
 
In the Bible it says "Ask, and it shall be given to thee"  (Of course, one has to be patient with faith, as things happen in the fullness of time).
 
Similarly, I liked very much what the Saudi Prince Al-waleed bin Talaal has suggested : "For whatever you seek, ask Allah....and when you get it, give thanks." 
 
Allah the merciful, the magnificent, loves all mankind and living creatures, for we are all His creation.
In the fullness of time, Allah shall grant to each and everyone to their hearts content what they desire, as they live by His commandments and live in peace and allow others to enjoy peace.
 
Each has to ask : "What bring we into the world?"  Other than God's name and good deeds, is there anything that He would like us to carry to Heaven?
 
Kind regards,
Duru-darshan.
 
 
 
 
 
 

What's happening with the economy?

Posted on May 29, 2013 at 4:29 PM Comments comments ()
I went for a long stroll this evening.  Even after a light meal, I felt a bit heavy.  Probably due to eating two boiled eggs yesterday (normally I seldom eat eggs). 
 
Where previously they had restaurants with a bar which seldom had customers, now they have turned them into family restaurants, no alcohol, no smoking, just good food, and they seem to be doing well.
Others, a Turkish kebab house, is on a big scale, but still has a steady stream of customers, it seems to serve fresh well-cooked food and the prices are probably reasonable.  Restaurants which people normally use when they celebrate also seem busy.  When people eat out, they spend to a budget, but don't like going to places which look a bit too homely, cheap food just to fill the stomach; those establishments will have the occassional customer, but that is all.
 
When I read that in England people have been spending less on food over the last few months, that suggests people are becoming health-conscious and buying selectively, and probably also eating out a bit more, as the good restaurants being busy would suggest.
 
The current Recovery in the U.S. is being fueled by the quantitative easing and the record low interest rate.  The housing market has started to pick up at last, although fewer houses are being built recently. 
 
The Japanese quantitative easing has helped Japan turn around, with the Yen and Japanese goods becoming a bit more affordable.  Coupled with the trend of Japanese investments overseas, this is certainly doing good to a lot of people.  As China buys more Japanese bonds and currency, the whole region is promising good growth.  Chinese newcasters and public figures seem to be sporting high-end European and American brands in attire, which creates balance in trade and fulfills peoples' taste.
 
Here in Ilford, shops which were too large are being converted into smaller shops, and people are putting good fitments and creating neat, attractive parades.  It probably remains for the Bank of England Guvnor to pump some additional credit and quantitative easing into the system to create a boom, which would be a great blessing and bring the normally happy atmosphere of peace and plenty.
On Thursday I pray the MPC members will give Sir Mervyn King a supportive vote to do the necessary
 
That's about it, except to mention that the Oil price is still quite high.  A lowering of $10 per barrel in the context of 30m b/d would be okay for most of the OPEC members, and as the rest of the world motors ahead, so can the OPEC economies continue to develop their infrastructure projects.
 
Kind regards,
Duru-darshan.
 
 

Hello, Kollam and Madurai....!

Posted on April 24, 2013 at 4:26 AM Comments comments ()
So glad to note so many readers from Kollam (near Kerala) - perfect weather you seem to have, friends - and Madurai, which has one temple after another in the unique layers of elegant figures building up to a welcoming temple...
 
Also glad to note so many visitors from Germany as well as Holland.  Good weather across Europe will add to the feel good factor, as the stock markets there seem to be recovering after recent retracements.  If Europe remains open for tourism without any strikes and such-like, then the potential for growth will return.  It is ultimately up to the people to provide a welcome and keep their economies growing.  That brings in additional tourists and students, giving a boost to the GDP.
 
I really feel the banks by extending loans and facilities to small business enterprises will help turn paper money into wealth.  Especially to restaurants, entertainment, kindergartens, reflexologists, hypnotherapists, new tech retailers, new tech trainers, and so on.  As one door closes, another opens, and the new technology should bring a new impetus for growth.
 
Imagination and implementation....Dream, make plans, and put into practice, bring into being your dreams...As you do good for yourself and the community at large, may God bless your enterprise and endeavour.
 
Well friends, so long now.
 
Duru-darshan.
 
 
 
 

China GDP figures

Posted on April 15, 2013 at 7:48 AM Comments comments ()
The China GDP figures for the first quarter, showing a slowdown, have sent the markets down, dampening spirits especially in commodities, gold, silver, aluminium. 
 
Oil, which was far too high anyway, has also come down.  A level below $85 a barrel should soon prevail, I hope.  Marked slowdown in huge economies like China cannot be corrected otherwise.
 
The falls in gold, copper, aluminium and Oil started over the weekend in the Far East markets, and have continued into Europe.  The U.S. markets will most likely follow suit until the winds are clear.
 
The markets will of course find support levels for the various commodities in due course. 
 
A zero point three percent drop in GDP is not by itself too big, but the compounding effect of a high Oil price has taken its toll, that's what I would say.  There is a mood of optimism in the Far East, with the situation in the Korean peninsula seeming to be cooling down, hopefully finding a peaceful solution with trade-off of aid which North Korea badly needs.  If the late Kim Jung-il's Golden Son can take a conciliatory approach, and wake up to the possiblity of development and prosperity through peace, then everything should auger well for continued growth everywhere and good times. 
 
I send you, dear Readers, this message of hope and peace.
 
Kind regards,
Duru-darshan.
 
 

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