As discussed yesterday, energy markets are now going through major change. Many of the investment banks who led the move to higher prices post-2008 are closing their commodity trading desks and withdrawing from the markets. Equally, the physical traders recognise that trying to push prices higher, without a real geopolitical threat, is like trying to push water uphill. […]
Tag Archives | Brent oil prices
As promised yesterday, the blog looks today at the impact of today’s high prices on oil consumption growth. As the chart, based on BP data shows, the ‘easy money’ policies of the central banks have only partially mitigated the impact of the oil price rally since 2009. Consumption growth has not fallen to the 0.8%/year level […]
Oil markets have been driven by speculative excess since 2009. None of the factors that were supposed to create supply shortages have ever occurred. Markets have never even been close to scrambling for product. And the rallies are getting shorter and shorter, as this simple fact is finally being better understood. Thus traders’ most recent efforts to create […]
The annual BP Energy Statistics publication is a treasure trove of information for anyone interested in global energy markets. One key area is the impact of today’s higher oil prices on consumption growth, as highlighted in the chart: It starts from 1965, and shows consumption growth for oil (red line), gas (blue) and total energy (green) Oil’s […]
History shows that that governments usually lose arguments with energy suppliers. UK premier Harold Macmillan summed up the position when talking about coal miners in the 1950s, warning: “There are three bodies no sensible man directly challenges: the Roman Catholic Church, the Brigade of Guards and the National Union of Mineworkers” Unfortunately, Europe now potentially faces an argument with its leading gas […]
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 […]
“May you live in interesting times” is a Chinese proverb which has an alternative meaning as a curse. And the blog suspects this duality of meaning may start to make a lot of sense as we go through 2014. We have, after all, been in a very strange world for the past 5 years. Markets […]
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 […]
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 […]
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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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.