Natural Resource Market Commentary

Interesting Report:
Goehring & Rozencwajg Report

"Our models tell us that global inventories will continue to draw and we run the risk of a huge upward move in prices starting right now” according to a report by Goehring & Rozencwajg. “We are being presented with the buying opportunity of a lifetime” in the energy sector.
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“Global oil inventories continue to draw rapidly and we have now reached the point where further drawdowns will put severe upward pressure on prices. Oil production from the US shales has slowed significantly in the last six months . . . Despite continued rampant bearishness, global oil demand continues to significantly exceed supply and global inventories are now drawing at record rates.”

“As Chart 1 vividly shows, we are now drawing down global inventories at the fastest rate ever experienced. Readers of our letters will be familiar with the drivers of this rapid drawdown: global oil demand is surging, while non-OPEC oil supply (both here in the US and abroad) is disappointing . . . the inventories have now drawn down to critical points where further inventory reductions will result in severe upward price pressure.”

When this has occurred historically oil prices “surpassed $100 per barrel”.