Christopher Fix, the chief executive of the Dubai Mercantile Exchange, shares his outlook for energy markets.
Trader profile: China leads excellent outlook for oil demand
Name: Christopher Fix
Job: Chief executive, Dubai Mercantile Exchange
Number of years as a trader: 14 years
What is the asset class and geography that you are focused on?
The asset class is energy, especially crude oil, and the market geography is the east of the Suez Canal: everything from the Gulf region all the way to North Asia. Basically a corridor from the Gulf to North Asia – I mean China, Japan, and Korea. Those are the main economies that are [expanding their] oil consumption. We’re the bridge [for the] fastest-growing consumption areas.
What’s your outlook for oil demand?
The outlook is excellent. Of course China is set to become the largest crude importer in the world very shortly. So the demand picture is very strong. Also, India imports over 80 per cent of all of its crude oil and most of it is coming from the Gulf region, so we have the two largest population centres on the planet which are quickly growing as our customer base.
What are the main risks to that outlook?
The macro risks are a slowdown in the growth of the developing economies. It’s mitigated by the fact that energy demand is growing regardless of … some slowdowns. China is now the largest buyer of vehicles on the planet; they’ve overtaken the US as the fastest-growing market of automobiles. And India still has one of the lowest penetration rates per capita of individual vehicles.
What was the best investment you were involved in?
The best investment at the moment is our expansion into Singapore. We’ve just established an office there, and this has put us closer to our Chinese clients.
What was the worst?
I think the worst one was when the exchange was established, they put a large investment into a trading floor – you know, the old-style guys with jackets trading on the trading floor. So the space that we took is built for that. Of course the exchange went electronic immediately.
What is the best investment at the moment?
I think that the continued investment in the energy products suite, the energy asset classes, especially infrastructure. You see Fujairah growing as a port facility, [and] refineries – hard assets are a good investment in the GCC, especially because the region is growing at over 4 per cent GDP.