SASHA NARYSHKINE: Yes, so these are… I mean, I have yet to see anyone stick their neck out too far on commodities prices, and get it right because the speed at which this downturn happened is absolutely incredible.

ALEC HOGG: But the key issue there is that Goldman said they’ve done their calculations on shale production, and $40.00 is when they start getting into trouble. Up to now, the estimates have been $60.00, even $80.00. If only at $40.00 the American shale producers get into, or start going bust, then there is still some downside because the beauty about this, with shale, is that you can close up the well and when the price gets above $40.00, open it up again. So I think lower for longer.

SASHA NARYSHKINE: I think what they also estimated, there’s a lot of the smaller shale producers actually hedge quite far out, as much as 12 months out, so the impact actually only won’t be felt on Capex spend, because remember that there’s a lot more oil rigs out there. I guess the key indicator to watch will be oilrigs in service, so when the big oilrig operators start getting a lot of recalls and you start seeing a drawdown in the number of jobs associated with that industry, and you know you’ve got a lot of people who pay attention to those things, so you’ll start to see. Then, I think that could be the turning point.

ALEC HOGG: But they are dropping and they have to be dropping because it was in a euphoric kind of situation that the orders were placed. What was interesting, and it could be a good opportunity for Grindrod, is the shipping rates apparently are now rising, because a lot of people are stockpiling oil in these big tankers. So the oil tankers have been put to the side, full of crude oil, which means that those ships that are in service will see a lift, one hopes for the likes of Grindrod, in their profits.

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