Marin Katusa Talks Oil Market Trends At Canvest 2015
When it comes to investing in the energy sector, Marin Katusa of Katusa Research is someone worth listening to. Here's a look at what he said about oil market trends during his keynote, and why he believes investors should be patient.
When it comes to investing in the energy sector, Marin Katusa, former chief investment strategist at Casey Research and recent founder of Katusa Research, is someone worth listening to. It's thus no surprise that he spoke on multiple panels and delivered a keynote presentation at the recent Canadian Investor Conference 2015. Here's a look at what he said about oil market trends during his keynote, and why he believes investors should be patient. "Innovation through necessity" Katusa started by outlining how the different wars that have happened over the last 200 years or so have affected commodity price trends. He explained that conflicts increase both the scarcity of resources and demand for commodities, also causing monetary inflation. "The trend is your friend," Katusa said. "Be patient. I think we are going to see more deflation in resources and innovation through necessity." Elaborating on the concept of innovation through necessity, he referred to a debate he had with Rick Rule in New Orleans about the US shale oil patch, recalling that Rule told him he thought shale oil would come offline. "I said, 'Rick, if you get the innovation, it is like a computer five years ago. Today they are cheaper, more powerful and better than they were five years ago. That's what is happening in the shale patch,'" he told the audience. He added, "yes, the rigs have come down, but the rigs they are using are better. So it's like a computer system — you don't need as many computers and servers as you needed 10 years ago because the ones you have today are so much better." Battle for market share Katusa also shed some light on why so much oil is still being produced in the face of a dropping price.