Hans van Cleef spoke to the FD about commodity markets and expectations regarding a super cycle. Scarcity and market speculation increasingly play a larger role in price formation.
'We want to get rid of fossil fuels, but we have no alternative,' says Van Cleef. 'At the current projected demand, investments in fossil fuels are too low to meet the demand. Then those investments have to go up, or we have to massively scale up investments in renewable energy so we can meet total energy demand.'
Van Cleef attributes the high volatility of commodities to the large role investors play, in his view, in the oil market, for example. 'Nowadays anyone can invest in oil. A lot of financial products have been added with the oil price as a basis. That makes the price move on investors' short-term expectations. These do not have as much to do with the fundamental outlook on supply and demand in the longer term.
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