Economics, Videos

Andy Hall ‘Better Off’ Betting On Oil Rise

Oil investor Andy Hall discusses his outlook for oil on “Bloomberg Commodities Edge,”┬ásays traders probably ‘better off’ betting on oil rise.

Andy Hall

Andy Hall Says Traders Probably ‘Better Off’ Betting On Oil Rise

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Transcript

For you that if you want to visit his dad on your expertise in the market does a one point two million barrel a day cut for next year do it.

Well hey that's the 64000 dollar question. I mean that's just one element of the supply demand story. You had OPEC's cut by one point two million barrels a day. But you have other things going on as well. I mean on the negative side there are headwinds regarding demand. No worries. With the threat of trade was how robust is emerging market country demand. Stronger dollar is generally not constructive for oil demand commodity demand in general. On the other hand not only have you had OPEC's cut production. There's no question that lower prices will have an impact on production growth here in the U.S. And I think you know when we look at 2018 is he the biggest surprise has been the the the rapid growth in U.S. oil production. Everyone knew it was going to grow but I don't think many people expected it to grow by as much as it has right now year over year growth in crude production here in the U.S. is about two million barrels a day. Back in January the U.S. government EIA was forecasting growth of a familiar gas. So they see that's a staggering difference. But of course you know prices are now dropping 25 30 dollars a barrel. So that will presumably have an impact.

On production growth here in the U.S. and we're going to get to dig deep in that inventory. Tell us about that before we go does it set it up. Are you more bullish or bearish right now.

I think you know with prices hovering around or a little over 50 dollars a barrel I think you'd have to have a pretty negative outlook on the global economy to be the prices will continue their downward trajectory. You know I don't think we're on the verge of a global recession or anything like that. And I think you know to use that old commodity adage price cues price. And a 30 percent correction or the 30 percent downdraft on you know not only is it going to impact the supply equation demand also will respond to that kind of price move. So I think on balance if you if you if you want to place a bet on oil right now you're probably better off betting on oil rise and going down.