Kyle Bass price forecast regarding crude oil remains bullish despite policy push for sustainable green energy and the outperformance of crude oil and oil stock sector experienced last year.
“I think there is a huge miss-match in policy and reality when you look at hydrocarbon demand over the twenty years to 2040 we think it is going to be right where it is today, although it will move higher before it moves to this level,” said Kyle Bass.
“For last six-seven years, we have been pulling capex out of the oil patch because we so desperately want to immediately switch to alternative energy. We all want wind and solar cheap clean power to run our country. The problem is you can not just turn off hydrocarbons. It takes 40 to 50 years to change fuel sources,” explained Kyle Bass.
“I think there is a huge miss-match in policy and reality when you look at hydrocarbon demand over the twenty years to 2040 we think it is going to be right where it is today, although it will move higher before it moves to this level”
KYLE BASS
Kyle Bass price forecast for oil is to buckle up
“I think you should buckle your seat belts. We could see well north of 100 USD this year on the front end,” he said.
Kyle Bass explained his bullish crude thesis.
“The same situation will apply to those who took oil below zero, will apply on the upside. In other words, when we reopen, the Omnicom will peak sometime in late January,” he said.
“We will get the world to reopen sometime mid-year, and demand is going to go right back to its highs. You just can’t switch on a new oil well,” said Kyle Bass.
“Private equity is pulling back, public markets are pulling back; only people funding the oil patch are family offices. We are going to see high prices soon, which is not good for anyone,” he added.
Kyle Bass thinks WTI prices will go well over a hundred, so how should investors play it? “You want to buy oil equities and front end oil futures. If we reopen you’re going to see numbers that we aren’t ready for,” he said.
“I think you should buckle your seat belts. We could see well north of 100 USD this year on the front end”
KYLE BASS
Kyle Bass’s price forecast regarding Chinese assets remains as expected bearish
Kyle Bass is known as a China permabear but he prefers to be called a China realist.
“Kyle Bass China’s economy is driven by the real estate market,” he said. But the digital economy accounts for nearly 40 percent of China’s GDP, according to the China Academy of Information and Communications Technology (CAICT), a government-affiliated think tank.
“China’s birth rate has gone down to 1.2. You need a birth rate of 2.1 to sustain the population” – Kyle Bass
Kyle Bass thinks the Chinese population is aging. “China’s birth rate has gone down to 1.2. You need a birth rate of 2.1 to sustain the population,” he said.
Kyle Bass believes China will experience a population decline because young men can’t afford to buy homes because they are 20 times their average income. China’s birth rate dropped to a record low of 7.5 births per 1,000 people.
Kyle Bass thinks the Chinese will crack down on property speculation to force prices lower.
Kyle Bass’ price forecast on Chinese equities is bearish.
“Chinese equities risk is that they don’t submit to western audits. How does anyone discount Xi Jinping’s risk? “Fool me once. You are not going to fool me twice,” he said.
But SEC demands access to audit documents could lead to all sensitive data of listed companies being “lost abroad.”
“People investing in Chinese equities breaching their fiduciary relationship to their investors,” he said. But follow the money. US institutional investors continue to buy substantial amounts of Chinese government bonds and stock. Ray Dalio’s Bridgewater Associates LP has raised the equivalent of $1.25 billion for its third investment fund in China.
