REUTERS
Posted online: Friday, August 19, 2005 at 1624 hours IST LONDON, AUGUST 19 : Oil prices will soar to more than $100 a barrel as part of a sustained commodities bull run, while equities will languish, U.S. commodities guru Jim Rogers told Reuters in an interview. "I don't know about the next quarter or even next year..... But it will go over $100 a barrel, but I've no idea how long it's going to take to reach there," said Rogers, a former business partner of billionaire fund manager George Soros. So far, U.S. crude prices have hit a record of $67.10 a barrel, registered last week. For Rogers, other asset classes, such as equities, are bound to suffer as expensive oil has an inflationary impact. "When commodities are high, stocks have done badly. The fact is it's always worked that way," he said. History if nothing else, suggests the commodities bull run will last until between 2014 and 2022. "Commodity bull runs have lasted 15-20 years ... We have got another nine to 17 years to go," he said. So far he said a rush of speculative and investment money into oil markets had probably had little impact on the overall price. "If you look at the reports to the government, speculators are sometimes net short and sometimes net long. Probably it hasn't had that much effect," he said in a telephone interview. But that could change. "If there's a bull market, people go there," he said. FUNDAMENTAL STRENGTH Far from being a speculative bubble, he saw current oil price strength as based on strong demand and a serious shortage of supply, while alternative energy sources remain uncompetitive. "Even if demand goes down, supply is going down at a very rapid rate," he said. Echoing comments from analysts such as banker Matthew Simmons of Simmons and Company International investment bank, who has cast doubt on the size of the oil reserves of Saudi Arabia, the world's largest oil exporter, he said he had never seen an independent audit of the reserves. At the same time, oil companies have been slow to invest to find new oil elsewhere. "There have been no great oil discoveries in more than 35 years," said Rogers. With prices driven so high, making money by entering the market now is difficult and some participants are "getting hurt," said Rogers, who has published a best-selling investors' guide entitled "Hot Commodities: How Anyone Can Invest Profitably In The World's Best Market." His Rogers International Commodity Index (RICI) was set up in August 1998 and has since delivered a total return of more than 200 percent. The RICI has a 44 percent energy weighting, a 19.94 percent weighting in grains and oilseeds, 14 percent in industrial metals, 9.96 percent in soft commodities, 7.10 percent in precious metals, three percent in livestock and two percent shared between rubber and lumber. | 