Wednesday, June 8, 2016

"India at structural inflection point for oil growth"

Link:

According to Bernstein’s Neil Beveridge, India is at a “structural inflection point for oil growth,” with several factors responsible for the surge in demand: the government program to rapidly expand the nation’s highway system; rising per capita income; and a shift towards building out manufacturing capacity to make up a larger share of the Indian economy.


India is now more or less at the same per capita income levels as China in 2002 – a time when China’s demand for oil and other commodities started to skyrocket. Bernstein sees India undergoing a similar, if less intense, industrialization and economic transformation. Oil consumption could grow at a 5.4 percent compound annual growth rate through 2021, or an increase of 1.45 million barrels per day (mb/d) over the next five years to 5.45 mb/d. by 2040, India’s oil demand could rise to 10 mb/d, a more than 6 mb/d increase from today’s levels, which will also be the largest source of growth on the planet.

As I mentioned yesterday, when I recommended Sprott Resource Corp, there is a ton of development that is going to take place in frontier and emerging markets. As those activities ramp up they will run into the declining supply brought on by the previous bear market which is contracting supply. That means a bull market in commodities and profits for the astute. 


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