Monday, June 23, 2008

The Oracle Of Oil

For years Warren Buffett has been referred to as the Oracle of Omaha. Now it appears that many would like to crown Arjun Murti as the Oracle of Oil.

From What Mr. Crude Oil Sees Ahead by Lawrence C. Strauss:

In 2004, Arjun N. Murti, a Top Energy Analyst At Goldman Sachs, published a report predicting "a potentially large upward spike in crude oil, natural gas and refining margins at some point this decade." It was a controversial call, with crude around $40 a barrel at the time. But it was right on the money.

Four years later, crude is trading around 139.

Murti sees energy in the later stages of a "super spike," in which prices rise to a point where demand drops off. In a note last month, he wrote that "the possibility of $150-to-$200-per-barrel oil seems increasingly likely over the next six to 24 months."

With supply growth constrained and global demand staying strong, prices must rise further, in Murti's view. Barron's caught up with him last week in his New York office.

The 39-year-old analyst doesn't give many interviews and keeps a low profile, preferring not to be photographed. But his strong views on energy have resonated across the financial markets.
Read the Barron’s interview here.

Dave Manuel wonders if what Mr. Murti says becomes a self-fulfilling prophecy.

From Arjun Murti - The Man Behind the "Super Spike" by Dave Manuel:
Are his predictions a self-fulfilling prophecy? If oil spikes and hits $200 per barrel, then surely his own words would have had a major impact on oil hitting this lofty level.

Unlike other analysts who seem to crave the spotlight, Murti prefers to remain in the shadows, out of view. According to a recent WSJ article, Murti is actually decidedly anti-oil, and believes that the "super spike" in prices will eventually lead to a significant decline in demand for oil.

Where will Murti's "Super Spike" call rank amongst the all-time greatest analyst calls ever? Time will tell. One thing is for sure though - when Murti speaks now, people will listen.

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