Silver Ridge Resources warns of the folly of believing that $100-a-barrel oil is a thing of the past.
Silver Ridge Resources, the China-based boutique investment house issued a stark warning to investors last week pointing out what it called the “folly” of believing that $100-a-barrel oil was a thing of the past. The firm’s caveat came after a further build in US crude oil inventories put paid to a meaningful rally in oil and drove prices back below $50.
“Right now, the supply story is steering the price of oil but that could all change very quickly especially with more of the world’s central banks clearly gearing up to introduce more economic stimulus to boost growth,” said Vivian Ericsson, chief commodities and resources research at Silver Ridge Resources. “We expect the monetary policy efforts of the European Central Bank and the People’s Bank of China to boost economic activity which will almost certainly lead to a rise in demand,” she added.
Since the precipitous fall in oil prices, a large number of shale oil rigs in the US have been mothballed and Silver Ridge Resources says it doesn’t expect many of them to come back on-stream when prices eventually rebound. The company has previously warned that investors would not be keen on exposing themselves to shale producers, many of whom ran into financial difficulty as prices plunged.
Now, as back then, it’s a case of once bitten, twice shy as far as lending money to shale producers is concerned,” explained Ericsson. “If, as an investor, you’ve taken a hit on a producer defaulting, you’re going to think twice before throwing cash at another especially when the Saudis have shown just how effortlessly they can handle the loss of revenue cheap oil represents,” she concluded.
About Silver Ridge Resources:
Founded in 2005, Silver Ridge Resources is an independent, full-service brokerage, investment planning and management concern committed to delivering innovative capital appreciation and preservation solutions to individuals and families with a high net worth. We place the welfare of our clients and their families first and we pride ourselves on having become the first port of call for their financial affairs. We consistently exceed our clients’ expectations by going the extra mile in terms of attention to detail, delivery of service and, most importantly, returns on investment.
From our headquarters in Shanghai, China and offices around the Asia Pacific region, we currently oversee the deployment of over $4.5 billion of assets on behalf of clients both in Asia and around the world.
Contact Silver Ridge Resources:
681 Haining Rd
Zhabei, Shanghai
200085
8675586243512
info@silverridgeresources.com
http://www.silverridgeresources.com