Thank you Mr Billionaire: Oil will hit well over $100 and stay high, says Rogers

Let's not get too cynical, but when another billionaire says "oil prices will soar to well over $100 a barrel and stay high as part of a sustained commodities bull run that has another 15 years to run", then this obviously strengthens our case. We can already see the poor African energy farmer rejoicing, as his crops bring in the cash. The advent of biofuels and green energy means a global redistribution of wealth - gradually, but steadily. Whereas the West was built on cheap and abundant petroleum, which it extracted through violence and with the help of dictators it put in place wherever there was a need - the green energy paradigm radically differs and promises to bring some form of social justice.

Billionaire U.S. investor Jim Rogers told Reuters some very remarkable things, which we welcome here at the BioPact.

"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.

Reiterating earlier comment oil prices would hit at least $100 a barrel, he said: "It will be much more than $100 before the bull market is over."

U.S. light sweet crude hit a new record of $75.40 a barrel on Wednesday and was trading at close to $75 on Thursday.

Rogers, a former investment partner of billionaire fund manager George Soros, has predicted the commodities bull run has at least 15 years to run.

"It's a major long-term bull market as far as I'm concerned," he said.

Aside from the bullish impact of tensions, described by Rogers as temporary, over Iran's nuclear ambitions and North Korea's missile tests, he said oil was drawing long-term support from the lack of large scale finds. Continued...

He did not know whether the Peak Oil theory that oil supplies are either at or very near their peak was correct.

But said: "If there is oil out there, you had better find it soon."

BIRD FLU COULD SEND PRICES LOWER

Apart from new supplies, a factor that could lower prices would be a widespread epidemic of bird flu spread between humans.

"If bird flu should break out, everything will go down and oil would go down to $40, but I would still urge people to buy oil. It would go down less than other things and it would be the first to go back up," said Rogers.

Rogers has set up the Rogers International Commodity Index (RICI) <.RICIX> for gaining access to the commodity markets.

In the first half of this year it outperformed its much bigger rivals the Goldman Sachs Commodity Index (GSCI) <.GTX> and the Dow Jones-AIG Commodity Index (DJ-AIGCI) <.DJAIGTR>.

While the RICI gained 9.7 percent in the first six months of this year, according to Reuters data, the GSCI rose 5.3 percent and the DJ-AIG gained 3.6 percent.

Rogers said he could not say exactly how much money was in the RICI, but it was at least $4 billion.

The commodity indexes, which analysts have estimated bring together a total of well over $80 billion, each comprise different combinations of commodities.

The GSCI and DJ-AIGIC adjust the weightings of various components depending on market performance, while the Rogers index maintains steady weightings, Rogers said.

"You need the same weightings every month," he argued.

Among those using the indexes are the mutual funds, which invest in groups of assets on behalf of individuals and institutions.

As an indication of how much room the commodities market, long regarded as a very risky, alternative investment, has to grow, Rogers said there were around 70,000 mutual funds for investing in stocks and bonds and less than 10 to invest in commodities.

"People have started to invest in commodities. It's a bull market and bull markets pick people up as they go higher and higher," he said.

Reuters.