Great Unwinding sees prices tumble

World markets have seen major falls since the Great Unwinding of policymaker stimulus began 2 months ago. Naturally, chemical markets have taken some of the biggest hits, given the industry’s role as a leading indicator for the global economy.  From today, the blog is therefore updating its regular chart (above) to focus on this impact: The biggest loser has been PTA in […]

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Oil prices have further to fall as Great Unwinding continues

Oil prices are highly likely to fall further, not rebound, over the next few months.  That is the blog’s conclusion to its 3-part analysis of likely developments in oil markets. Having looked at the outlook for oil supply and demand over the past 2 days, today’s post looks at the key question of ‘what does this mean for oil […]

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OPEC faces New Normal dilemma as oil demand slows

Yesterday’s post described how OPEC oil producers are seeing their export sales to the US start to disappear.  But this, of course, is only one side of the story.  As the chart from the Wall Street Journal shows, Saudi needs a $93/bbl oil price to balance its budget.  Most of OPEC needs a higher price.  Only Kuwait, UAE and Qatar need […]

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Saud, FDR

Saudi oil policy shaped by defence dependence on USA

The world now faces a supply glut in almost every source of energy, including oil, gas and coal.  It is also seeing major increases in output of key products including gasoline, diesel and petrochemicals.  Yet as the International Energy Agency has warned, “the recent slowdown in demand growth is nothing short of remarkable.” The blog is therefore launching today a 3-part series […]

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“You’d have to be crazy to think the stock market isn’t crazy”

The headline above was the Wall Street Journal’s summary of last week’s market action.  But was it really “crazy”? Perhaps it just felt “crazy” to those who had wanted to believe central banks’ stimulus policies could somehow restore growth to previous SuperCycle levels? Maybe instead, last week was just the early stages of the Great Unwinding of these failed policies?  Certainly […]

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Chemical markets highlight economic downturn now underway

The chemical industry remains the best leading indicator for the global economy.  The only problem is that most policymakers continue to ignore its obvious message about the failure of their stimulus policies to restore growth. 2 months ago the blog highlighted how its IeC Downturn Monitor was indicating that: “Markets appear to be continuing to move, slowly but […]

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Unwinding

IMF says economic growth may never return to pre-crisis levels

The Great Unwinding of policymakers’ failed stimulus programmes is now clearly underway in the global economy.  The headlines this week all focused on the latest International Monetary Fund (IMF) report: “IMF says economic growth may never return to pre-crisis levels.” And then, in response, the US Federal Reserve suddenly realised that the US economy was not […]

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India toilets Jul14

Indian Oil join campaign to build toilets in India

The blog is delighted to be able to congratulate Indian Oil (IOC) on becoming the first company to commit to building toilets in India.  In response to Premier Modi’s appeal, the chairman of India’s bggest refiner, B. Ashok, last week personally began to build toilets at a school near its refinery in Mathura in Uttar Pradesh state. IOC have […]

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Subprime loans drive US auto sales growth

Major problems are developing in the US auto market.   The critical issue is that companies have been adding capacity since 2009 on the basis that demand would return to SuperCycle levels.  But it hasn’t. The result is that the mass market has become more and more competitive.  Only sales into the high margin luxury/pickup segments are actually […]

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Turkish plastics markets see imports fall for first time since 2008

Turkey is the blog’s “go-to” market when it wants to confirm trends in global markets.  The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity.  This means it is essentially an opportunistic market from a sellers’ viewpoint. During good times, exporters will only divert product from […]

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