Risk managers have no shortage of things to watch as 2018 unfolds, including the continued lookout for a rebalanced oil market, Cargill energy derivatives senior director Gregory Broussard said this week.
A persistently flat yield curve for long-term bonds, the prospect of the US Federal Reserve and other central banks raising interest rates, political strife, money flows and the replacement of Opec supplies by North American wells all play a part, Broussard said at the Argus Americas Crude Summit in Houston.
"The biggest risk for 2018 from a macroeconomic standpoint is paying really bad prices for expensive assets," Broussard said.
Politically, Broussard said the biggest risks of a year ago -– the election of Donald Trump as US president and the UK's exit from the EU –- have not materialized as major market movers. This year, instability in Venezuela and Iran, along with the prospect of the US decertifying its nuclear deal with Iran, are the headline items.
But as far as oil markets go, supply and demand reign supreme, he said.
"The ultimate thing we need to pay attention to is, as Opec pulls barrels off the market, how is shale replacing those?" he said.
