Currie Says Oil Will Break Above Consensus View on Fed Cuts

Currie Says Oil Will Break Above Consensus View on Fed Cuts

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(Bloomberg) — Oil prices are set to rise well above the current consensus view of $70 to $90 a barrel if the US Federal Reserve cuts interest rates in coming months, according to Carlyle Group LP’s Jeff Currie.

“I want to be long oil and the rest of the commodity complex in this environment,” Currie told Bloomberg TV Tuesday in his first interview since joining Carlyle from Goldman Sachs Group Inc., where he became the public face of the Wall Street bank’s commodities research and was well-known for his bullish price calls.

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China’s move to support manufacturing and Europe rebuilding stockpiles all point to stronger commodity prices, particularly for oil and copper, said Currie, Carlyle’s chief strategy officer of energy pathways. “The upside here is significant,” he said.

His comments come one day after copper prices hit an 11-month high, amid speculation that rate cuts could spur demand, coupled with concern over the risk to supplies of the metal from mines and smelters. Oil prices have been relatively stable in recent months, though Brent crude rose to just over $87 a barrel on Tuesday amid concerns over the impact of Russian refinery outages.

In the longer term, the uncoordinated and messy nature of the energy transition will lead to heightened price volatility, Currie said. Owning both traditional fossil fuel assets along with greener energy sources is key to hedging those risks, he said.

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“Three years ago, everybody was green, green, green, and this week they’re all questioning it,” he said, referring to the CERAWeek by S&P Global energy conference in Houston. “The reality is somewhere in between.” 

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(Updates with copper and oil prices in fourth paragraph)

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