No End in Sight for the Commodity Bull Market

LONDON: Oil prices are on an indefinite path higher as dwindling supplies fail to keep pace with demand, while the latest European debt-crisis is the beginning of the end for the euro, influential US investor Jim Rogers said.

Rogers is a famously bullish commodity investor and has repeatedly predicted a "supercycle", when raw material prices will advance for longer than in any previous uptrend.

"Oil supply is going down faster than demand, known reserves are in decline and while that continues to happen oil prices are going to go much, much higher," Rogers told Reuters in a telephone interview on Thursday.

US crude oil prices hit a record high above $147 a barrel in July 2008, before slumping to below $33 in December that year. Prices recovered during 2009, despite weak demand and bulging oil stock supplies, and traded around $74 on Thursday.

Some analysts have said oil prices have been inflated by speculative trading, which is being investigated by the US regulator, but Rogers said the money flows simply reflected investment opportunities in oil markets.

"If the fundamentals weren’t right the price would not go up. Many people invested in commodities in the 1980s and 90s and didn’t make any money because the fundamentals were bad, now people are investing and making money because the fundamentals are good," Rogers said.

Rogers, now based in Singapore, rose to fame after co-founding the now-closed Quantum Fund with George Soros nearly four decades ago. The fund returned 4,200 percent during the 1970s and famously bet against the British pound in the 1990s, before the UK currency crashed in the lead up to Black Wednesday.


This month the euro has come under extreme pressure following a Greek debt-crisis that threatened to spread across the continent, prompting policymakers to make available a $1 trillion rescue package, which Rogers said could spell the end for the European currency.

"It was a terrible thing to do, it ensures that the euro will disappear some day because now it means anyone can do whatever they like because they’re going to be bailed out.

Read the rest of the article

Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.