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Oil markets pressured by copper price falls

Whisper it quietly to your friends in the oil business.  But oil prices are looking very vulnerable.  Producers and the central banks have done a great job in creating the myth of imminent shortages – these have always been ‘just about to happen’ as a result of supply disruptions or the long-promised recovery in global […]

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Can oil prices stay at $100/bbl forever?

Sometimes the blog’s mind goes back to its happy days in Houston, Texas, when it set up and ran ICI’s feedstock and petchems trading office.  And it thinks through the factors that it would have considered when deciding whether to buy, sell or sit on the sidelines. The memory came back during last week’s lively ACS webinar, when […]

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European oil travels the world as market complacency increases

The blog has a suggestion for a quiz question for anyone planning party games over the Christmas period: Q.  What was the longest distance travelled by a cargo of crude oil in 2013? A.  9000 km (5500 miles) from Scotland to China Isn’t that amazing?  We are constantly being told that supply is short, and that today’s high prices are […]

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Iran talks offer hope on oil prices

Iran has been at the centre of all the major oil market price spikes in the past few decades: Today’s record prices on an annual basis are partly due to market fears over supply disruptions due to the Iran/Israel nuclear issue Fears over a nuclear showdown also led prices to jump to $150/bbl in July 2008, when the […]

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Oil market hype fails to take prices out of their triangle

Pity for a moment those poor souls whose income depends on finding ever-more creative ways of justifying today’s record levels of oil prices.  One by one, all their favourite stories have disappeared.  Even the traditional summer warnings of record hurricane disruption have so far failed to deliver. How different it is from the start of the crisis, when the […]

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Pension fund speculation boosts oil prices as consumers suffer

Think back over the past 5 years.  Can you remember a single time when oil supplies were actually difficult to find?  If you can’t, then you have the same memory as the blog. Official statistics support this view.  Thus last week’s US EIA report noted that “U.S. crude oil inventories are near the upper limit […]

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High oil prices take European operating rates to record lows

Life doesn’t get any easier for Europe’s olefin producers and the consumers who depend on them.  As the chart shows, based on latest APPE data, operating rates averaged just 78% in H1.  This is almost as bad as H1 2009, when they were 76%.  And it is a long way away from the 90% levels […]

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Speculative Brent rally lifts oil prices just $3/bbl

Last week should have been a great week for the speculators.  As in July 2008, they were able to spread the rumour of imminent Middle East war and upheaval.  5 years ago it was the threat of Israel bombing Iran’s nuclear facilities, and leading to a blockade of the Straits of Hormuz.  This time it […]

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WTI v natgas Jun13.png

What goes up, usually comes down

Something very strange has happened to oil prices since 2009, as the chart of the ratio between US oil and natural gas prices shows: • Between 1986-2008, the ratio averaged 9.6, and was typically in the 6 – 14 range (6 is oil’s relative energy content versus natgas, whilst 14 was seen during the first […]

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Brent Jun13.png

‘The Trend is Your Friend’, until it isn’t

The blog still owns the lapel button it was given when running ICI’s feedstock and petchem trading office in Houston, Texas. Its advice for any trader is excellent – ‘The Trend is Your Friend’. But as all traders learn over time, there are moments when the trend can change. And sometimes, when change happens, it […]

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