[349] Katusa on oil’s future, Werner on banks as not just financial intermediaries

Crude oil hit a five-month high on Wednesday. At .87/barrel, West Texas Intermediate crude is threatening the /barrel mark for the first time since December. Brent crude for June rose $.63 to .15. Analysts say that fresh tensions in oil-producing Libya have raised concerns about a supply disruption in the Middle East. Previous reports said that protests in Libya had shut down oil deliveries to a port in the east of the country. Erin weighs in.

Then, Erin is joined by Marin Katusa – hedge fund manager and director of Copper Mountain Mining. Marin tells us why he thinks oil has gone up to /barrel and gives us his take on if US production is officially in decline. His overarching view is that oil is range bound between -75 a barrel because of the access to shale oil wells ready to be exploited for production. He is skeptical that demand will increase enough to absorb all this oil and so the range-bound nature could persist below where producers find it economical.

After the break, Bianca gives us a daily news roundup featuring other major business headlines including HSBC and UBS earnings, a new deal between IBM and Facebook, and how the EU is threatening major tech companies in the US.

Afterwards, Erin sits down with Richard Werner – founding director of the Center for Banking, Finance and Sustainable Development at the University of Southampton. Richard tells us what the central bank – not acting to fulfill its mandate in crisis – actually mean to households and businesses and gives us his take on banks creating 97% of the money in the UK economy. Werner’s view is that banks are not just financial intermediaries which connect scarce savings with investment opportunities. Rather, they are entities that create deposits every time they make a loan, and, thus, increase the broad money supply without constraint.

And in The Big Deal, Erin and Edward discuss the INET conference on Finance and Society taking place in Washington at the International Monetary Fund, and headlined by Fed Chair Janet Yellen and IMF Chief Christine Lagarde.

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