Hedge funds exit oil price rally as Saudi plans post-oil economy

“Within 20 years, we will be an economy or state that doesn’t depend mainly on oil“. This critical statement from Saudi Arabia’s deputy Crown Prince has been lost in the hype surrounding Q1′s hedge fund-inspired rally in oil, commodities and Emerging Markets.  There has seldom been a better example of markets failing to see the […]

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Index Apr16

Reality battles illusion in world financial markets

“Buy on the rumour, sell on the news” is one of the most reliable definitions for a weak market.  And that seems to have been the picture in Q1 across commodity, stock and bond markets. The key issue is the ongoing battle between Reality and Illusion: Reality accepts that ageing populations have lower levels of […]

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China’s cotton auction key pointer for global economy outlook

Cotton markets are poised for another testing month in April.  The outcome will also have potentially major implications for the polyester chain – and in turn for commodities markets more generally. The reason is that China has announced that its long-awaited cotton auction will take place in the second half of the month.  Cotton stocks […]

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The end of the Economic SuperCycle

A paradigm shift is underway in global petrochemical and polymer markets, as I discuss in a new article for ICIS Chemical Business. Previously successful business models, based on the supply-driven principle, no longer work. As our new study, “Demand – the New Direction for Profit”, explains, companies now need to adopt demand-led strategies if they […]

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Brexit vote will hit UK, Eurozone and global economies

Slowly, but surely, a UK vote to leave the European Union is becoming more likely.  In any referendum, the Yes campaign (in this case called Remain) have to argue a positive case.  But  this is not happening in the UK – and the vote is less than 3 months away.  Unsurprisingly, therefore, as the poll […]

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Central banks cannot control economic fortune of 7.3bn people

Trillions of dollars have been spent on stimulus by central banks in the developed world since the financial crisis began in 2008.  Clearly these policies haven’t worked – but they are now lining up to do more of them. In this interview with Tom Brown, deputy editor of ICIS news, I argue that their analysis […]

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US auto sales head towards price war as subprime loans rise

The warnings keep coming about the underlying health of the US auto market.  But, as with the subprime housing crisis, nobody wants to listen: Last October, the US Comptroller of the Currency warned that some activity “in auto loans reminds me of what happened in mortgage-backed securities in the run-up to the crisis“ Yet auto […]

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Oil Mar16

Oil market speculators profit as central banks hand out free cash

Oil markets are entering a very dangerous phase.  Already, many US energy companies have gone bankrupt, having believed that $100/bbl prices would justify their drilling costs.  Now the pain is moving downstream. The problem is the central banks.  Hedge funds have piled into the oil futures markets since January, betting that there would be lots […]

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China’s rising exports: less about growth, more about exporting deflation

China’s move towards self-sufficiency is radically changing global oil and petrochemical markets,as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Markets used to cheer when China’s exports rose, believing this showed the global economy was in good shape. They are still hopeful today, despite the 25 per cent fall in February’s […]

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US ethylene output rise warns of market share battles ahead

“The reality is the US from a chemical standpoint is a very mature market. We have some demand growth domestically in the US but it’s a % or two – it’s not strong demand growth,” Pryor said, adding that polyethylene hardly grew in the US in a decade. “That is not going to change. “The […]

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