Question-and-Answer Session
Operator
We will now be conducting the question and answer session. [Operator instructions].
Malcolm E. Polley
While we’re waiting for that, I did get one more question via email, and it was a question of what do we expect to happen with energy? Well, prices rise back up dramatically and gradually. Our expectation on oil prices is that we’ll probably end 2009 in the $50 to $60 a barrel range.
Oil prices, energy prices, do follow global economic activity, so we should not get a dramatic move in oil prices upward unless and until the global economic environment improves. If, on a global basis, we continue to be in a recession for all of 2009, then we will expect that oil prices will probably continue in the same range. Once the global economy starts expanding again, then the supply and demand issues will again take over and we would expect oil prices to rise.
Long-term, and we’re talking probably in the next three to five years, we would not be surprised to see oil prices head back above that $100 a barrel range. They got there much more rapidly than we expected, and we would expect at some point to see them go back to that range, but we will get a bit of a break over the next year or so, until global economic activity moderates.
Are there any questions via telephone?
Operator
There are no questions at this time sir.
Malcolm E. Polley
We’ve got another question via email and it asks, what strategy will we pursue this year to take advantage of opportunities in equities and bonds? That’s an interesting question. What we’ve been telling people is that in the fixed income arena that we are paying very
close attention to credit spreads, we’ve always done that, and we will continue to use that approach.
What that has meant is that we were very aggressive in the corporate equity market in late November and December, a little less so in early January, and have a little less attracted to the corporate market as spreads have come down to around 200 basis points over treasury.
We’re also seeing some really strange things happen in a new issue market, which reminds us a lot of what happened in the dot com bubble in the late 1990’s, where if you would have an issue come to the market, it would be several times over subscribed, and you’d end up getting a very small fraction of what you indicated an interest in.
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