The March IeC Boom/Gloom Index confirms the blog's sense that markets are sitting on a fence, waiting for something to happen. As the chart shows (blue column), it has risen back to 4.1, just at the point which divides strong from weak markets.
Similarly the US S&P 500 Index (red line) is stuck at 1369, at exactly the 1370 line which would mark a major breakout. Meanwhile oil markets are also trapped, with Brent at $124/bbl remaining at the top of its triangle.
Interestingly, a number of major institutions now seem close to accepting the blog's long-standing argument that high oil prices lead to
A reader has also kindly drawn the blog's attention to a paper by Prof James Hamilton of the University of California, San Diego. It notes "All but one of the 11 postwar US recessions were associated with an increase in the price of oil, the single exception being the recession of 1960."
ICIS pricing comments confirm the supply-driven nature of current markets. Upstream prices are close to the levels at which the IeC Downturn Monitor originally launched on 29 April. But downtream PE/PTA have so far failed to pass today's increases through to their customers:
PTA China (red), down 10%. "Activity was limited as persistently weak downstream polyester sales continued to weigh on market sentiment"
HDPE USA export (purple), down 9%. "Globally, PE prices increased on mounting energy and feedstock ethylene cost pressure"
Benzene NWE (green), down 3%. "Sources believe that the current bullishness on crude and naphtha numbers will continue to support price levels in March"
Naphtha Europe (brown dash), down 2%. "Interest in naphtha remains mediocre"
Brent crude oil (blue dash), down 1%
S&P 500 Index (pink dot), no change