News

July 02, 2008

The World Is Structurally Short Energy, Says The Latest Research From Southern Cross

By Alastair Ford

“The world is structurally short energy. The evidence is everywhere.” So says the latest research from Southern Cross Equities, Australia’s largest independent stockbroker and emerging investment advisory firm. The principal driver is emerging markets, and specifically China. According to Southern Cross, industrialization around the world is “driving a structural increase in energy demand”, and that “against a backdrop of chronic supply shortages”.

The evidence isn’t hard to find either. The coking coal contract has settled up 300 per cent, while the some steaming coal contracts have increased by 200 per cent. Recent iron ore price settlements have showed an average 85 per cent price increase for the Australian producers. The oil price has risen by 40 per cent this year, has tripled over the last two years, and is currently trading at record highs. In addition, LNG contract prices have also risen dramatically. Markets may not always be...