In his latest Viewpoints note, he responded to people's concerns about an escalating Iran-Israel conflict and how it might cause oil prices to rise.
O'Neill is pretty sanguine on the matter.?
He writes in his latest Viewpoints note:
"...I have noticed an increase in the number of deleted emails that purport to increased confidence from Middle Eastern experts about an Israeli strike on Iran, with some suggesting it could be very soon. In view of the events percolating elsewhere in the region, especially Syria, it is not clear to me why this would be an especially wise thing to do, but what do I ? or perhaps anyone ? know about such matters?
Just before I went away in the middle of last week, I received a very interesting Harvard-Belfer report about a coming oil glut. Entitled ?Oil, the Next Revolution?, it included a lot of evidence to support those that believe ? as I do ? that the long period of rising prices in the past decade have caused sufficient supply-side responses (as well as demand side), so that the last problems people should be worrying about are oil supplies and oil prices. I have also read some rebuttals, but they are heavy in technical jargon and don?t persuade me.
I find myself wondering, if we could ever put this Iran-Israel talk out of the market?s minds permanently (probably a ridiculous notion), how much would oil prices drop?"
Basically, he thinks that already high prices have brought on plenty of extra capacity. Those high prices have also caused those on the demand side to adjust.? And furthermore, his last point implies that there is already a steep risk premium priced into the price of oil.
SEE ALSO: Abby Joseph Cohen's Epic Presentation On What's Really Happening In Markets And The Economy >
Source: http://www.businessinsider.com/jim-oneill-middle-east-conflict-oil-prices-2012-8
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