How Far Will Oil Prices And Other Commodity Prices Fall?
- By Professor Prabhu Guptara
- Published 10/18/2008
Professor Prabhu Guptara
Professor Prabhu Guptara is Executive Director, Organisational Development, Wolfsberg (a subsidiary of UBS - one of the largest banks in the world). He is also Freeman of the City of London and of the Worshipful Company of Information Technologists, and Chartered Fellow of the of the Chartered Institute of Personnel and Development; he is also Fellow: of the Institute of Directors, of the Royal Commonwealth Society, and of the Royal Society for the Encouragement of the Arts Commerce and Manufactures; and he continues to supervise PhD research at the University of Fribourg (Switzerland) as well as to be Visiting Professor at various Universities and Business Schools around the world.
Earlier roles include: a Governor of the Polytechnic of Central London, Member of the Council of the British Institute of Management, of the International Federation of Training & Development Organisations (IFTDO), of the Association for Management Education and Development (UK), of the South East Regional Council of the Confederation of British Industry.
Judge, 1988 National Training Awards, 1980 Commonwealth Poetry Prize, 1990 & 1991 Deo Gloria Prize for Fiction; Chair of the Panel of Judges, Deo Gloria Prize 1992 & 1993.
Experience with an enormous range of organisations including: Akzo Nobel (Netherlands), the Associated Banks Institute (Germany), Barclays Bank (UK), British Petroleum (UK), the Council of Europe, Cultor (Finland), Deutsche Bank (Germany), Groupe Bull (France), Federation of Finnish Engineers (Finland), the International Management Association of Japan, Kemira (Finland), Kraft Jakob Suchard (Switzerland), Leadership Academy (Finland), Nokia Telecommunications (Finland), Novo Nordisk (Denmark), Sedgwick International Insurance and Reinsurance Brokers (UK), Singapore Institute of Management, Sonatrach (Algeria), Sun Alliance (UK), UNCTAD, Valeo (France), and so on.
Organiser, chair and lecturer by invitation for numerous international conferences, he has contributed widely to radio and television in the UK and other countries (The Money Program, Any Questions) and has written for Financial Times (London, UK), The Guardian, The Times and other publications; articles, for example, in The Gower Handbook of Management, The Gower Handbook of Quality, and the International Encyclopedia of Business & Management (Routledge).
A CD-ROM has been issued of his lecture at the Professorenforum, University of Zurich, titled "Making the World Better - Why it does NOT happen...and what TO DO about it"
Further information available from email@example.com
His best-known research publication is "Top Executives in the Global 100 Companies and their IT-Competence" (ADVANCE: Management Training Ltd., UK, and Wolfsberg Executive Development Centre, Switzerland, 1998); and he is included in Debrett's People of Today and in Who's Who in the World. Professor Prabhu Guptara lives in Switzerland.
The markets are now very disconnected from realities and are based on "sentiment" or "herd instinct".
I predict therefore that the oil price will fall to around $50 before recovering (at some point in the future) to $70-80. I don't anticipate prices arising to over $100 again for some considerable time.
There will be similar drastic falls in commodity prices before a parallel recovery.
How long will it take for the global economy to recover? It will not start recovering earlier than say 3-4 months after any actions by the new US President (and her/his team) - assuming that such actions are effective.
Before any recovery can happen, it is necessary for the global economy to clean out "excess liquidity" (i.e. absorb the money that has been printed without regard to the total national value of goods and services, most notably in China and the US, but also by most other countries, since the dot.com bust).
In other words, I don't see a recovery before Summer 2009 at the earliest. Recovery should, in fact, take much longer - but the global economy has stopped responding to any "should" and has become entirely irrational.
Much more fundamental changes (and of the right kind!) are necessary for the world to see sensible and stable economic growth, but whether the changes that will come are of the right or wrong sort remains to be seen.