Francisco Blanch, head of global commodities research at Banc of America Securities-Merrill Lynch, has been answering FT readers’ questions on the outlook for the oil market. He predicts a long-term average of $72 per barrel in real terms, but says a return to $150 is quite possible by 2011-12, and even more likely by 2015.
He has plenty of interest to say about Opec, biofuels and other renewable energy, the impact of speculation on oil prices, and more, but perhaps his most thought-provoking comment is his analysis of how the world ended up in its present mess. As he puts it:
In our view, a global misallocation of capital sits at the heart of the current economic crisis. In simple terms, capital markets failed in recent years and channelled too much money into real estate, too little into energy.
If he is right, we will be living with the consequences of the “roaring noughties” long after the financial crisis is over.