Hardcover: 312 pages
Publisher: Wiley; 1 edition (March 16, 2015)
Language: English
ISBN-10: 1118868005
ISBN-13: 978-1118868003
Product Dimensions: 6.3 x 1.1 x 9.3 inches
Shipping Weight: 1.3 pounds (View shipping rates and policies)
Average Customer Review: 4.3 out of 5 stars See all reviews (7 customer reviews)
Best Sellers Rank: #496,303 in Books (See Top 100 in Books) #202 in Books > Business & Money > Industries > Energy & Mining > Oil & Energy #2909 in Books > Business & Money > Finance
Two portfolio managers offer their view of the energy markets in a forceful manner. Their opinions would have few supporters a year ago but after the recent declines in oil prices the followers have probably increased in numbers. Madrid born Daniel Lacalle entered the financial markets after working a decade in the energy sector at Repsol. At PIMCO Lacalle was voted number one among European buy-side managers. Diego Parrilla is a commodity hedge fund manager. Their thesis is that energy prices will drift downwards over the longer term. “The last barrel of oil will not be worth millions. It will be worth zero.”As the authors see it a number of factors conspire to drive energy prices down. Future energy demand is often overestimated. Increasing efficiencies has meant that the amount of oil needed to generate a percent of GDP-growth has been going down for decades. Despite okay economic growth post the financial crisis US has actually had flat energy consumption since 2005.Short-term substitution between energy sources is tricky as power plants, ships, vehicles are constructed for one energy source and the life of this equipment is long. Over time however, differences in prices between energy sources spur human ingenuity and substituting technologies are created. Oil has had a near monopoly on powering means of transportation – until now. Electric cars and other emerging technologies are starting to make their way into the vehicle fleets lowering the demand for oil.At the same time technological advances have created a supply glut in energy markets. This applies to fracking and horizontal drilling in the natural gas market as well as for state subsidized and overbuilt renewable energy sources.
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