Business Case Studies & Business Publications

Global Asset Allocation: Crude Calculati...

Warnock, Francis E...

Case

Global Asset Allocation: Crude Calculations

Warnock, Francis E.; Hergenroeder, Leo

F-1647 | Published March 14, 2011 | 22 pages Case

Collection: Darden School of Business

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Fully updated through end-2017, this case examines the oil market. The protagonist's task was to decide whether her pension fund should allocate some funds to oil, and if so, how much. The decision requires an assessment of oil’s features as a strategic component in any portfolio as well as whether the time is right for an opportunistic tactical allocation. Factors that must be considered include how supply and demand for oil will be affected by global economic policy, geopolitical concerns, the availability of alternatives such as natural gas, and rising demand from emerging markets, among other factors.

To use the tools of international macroeconomics, combined with an understanding of supply and demand in the oil market, to form a view on the likely path of oil prices.