After a Bloomberg Poll

Will 2014 be a great year for investments? Do the investors truly believe that 2014 will be the best year since 2009? Let’s take a look at the poll results on various indicators discussed in this survey. About the economies 72% of the global investors have the confidence that the US economy is improving. In that, 22% think the US economy is stable and 6% say it is deteriorating. Global investors are not hopeful about Chinese and Brazilian economy. It's not a surprise when 21% of the global investors opined that they don’t have any idea about Brazilian economy.

Which are the main factors going to drive the US economy in 2014? Is it the increased oil and gas production or more companies investing due to the rise in confidence? Whether the growth in the job market will act as a catalyst? Or the improvement in real-estate and auto industry? The increase in the US population will demand more houses. In the US one birth happens in every 8 seconds, a death in every 12 seconds, and one international migrant in every 40 seconds. In 2012 the US population was around 313 million and in 2013 it’s 315 million. Consumer spending will increase, but the borrowing could be on the lesser side.

Now when we talk about the Brazil, the October 2013 riots may be an ugly chapter which Brazilians may forget. It was the outcome of the corrupt political system, failing health care, ineffective educational system and raising expenditures. Finance minister, Guido Mantega is very much hopeful about the Brazilian economy in 2014. He claims that Brazil has overcome primary fiscal surplus target.

The target was 73 billion reals but they claim they have achieved 75 billion reais in 2013. The reais went down by 13% in 2013, got an appreciation of 0.4% to 2.3 / USD till Jan 5th. He agrees that the trade surplus was lowest in the last 13 years that is $2.56 billion. Brazil expects a 4% advance in 2014. This Latin American country has faith in oil exports, higher tax receipts and support for infrastructure, natural resources and transport.

In this Global poll no one doubted the opportunities in the US, 4% global investors who participated in the survey thinks that US economy will grow by 6%, 3% of them believe the growth will be of 40% and 2% says it will 44% and 2% believes the growth will be less than 8%. That time will prove.

Will the Brent Crude Really Come Down in 2014?

Brent Crude price showed the lowest of this month which is $106.77 and may go down to $80/barrel according to the Saxo Bank prediction. Will price determinants, supply and demand and market sentiment work in favor of Brent Crude? The report says no. If no the why? Experts looks at the increase production from Saudi and rising non conventional method of oil extraction.

EIA, Energy Information Administration expects production from non-OPEC countries would grow to around 2million year on year. The oil production from Libya, Iran are supposed to rise as the civil unrest and other restrictions imposed are getting eased. Among the futures traders, hedge fund short position, increased supply of the US shale oil, and solved transportation issues also will contribute to the rein on the climbing oil prices.

The advanced technology used by the US has helped them in extracting more oil from shale rock ie Kerogen oil. Even though production of shale oil is highly underestimated by the market, it will become prominent in the future. This will result in bringing down oil prices


Now the question is whether the increased production will challenge the Russian
dominance. Currently Russia is the largest oil and gas producer and their position can be in a question since the Russian technology on il extraction is still not at par with the US. The US produces 22 million barrels while there is no such authentic data on Russian oil production other than report from Moscow which says Russia produces around 21 barrels/ day.