Tag Archives | Brent oil prices

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Oil traders celebrate as Fed launches QE3

It was a very good week for traders in oil markets. Guaranteed profits are rare enough these days, even for them. But the combination of Mario Draghi at the European Central Bank, and then Ben Bernanke at the US Federal Reserve, meant they could put the champagne on ice as soon as they entered the […]

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Prices rise whilst demand falls

The blog is extremely concerned about recent market developments. Nobody minds higher prices, if they are a response to strong demand and can be passed through to customers. But today’s high prices have nothing to do with strong demand. On the contrary, in fact. Most consumers are actually reducing output. Equally, the wider economic outlook […]

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Computers push oil prices higher, again

Trading volumes in financial markets are very low these days. Many ordinary investors are on holiday, and others are focused on the Olympics. So it is easy for the high-frequency computers to create major volatility – and large profits for their owners. Thus they managed to create a 1.5% fall in the S&P 500 on […]

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Financial markets hope for more policy ‘lunacy’

The last few days have seen financial markets rallying, whilst the news from the real economy gets worse. US GDP growth in Q2 was just 1.5%. And the Wall Street Journal notes the recovery since 2009 has been the weakest in the post-War period. But that doesn’t matter to the computerised trading systems that now […]

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‘Waiting for Bernanke’ is hottest show on Wall Street

‘Waiting for Godot’, the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial markets are currently staging their own version of the play: • They no longer see […]

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A is for Agility in today’s VUCA world

Pity the poor purchasing manager, who: • Must keep inventories low as end-user demand remains slow, and the CFO remains very worried about the working capital risk • Must keep inventories high, to minimise the risk of running short if supply problems develop and prices jump Benzene (green line), as always, is the great example […]

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Weak chemical markets suggest difficult times ahead

Over Christmas, the blog spent some time considering whether its IeC Downturn Alert had served its purpose. By luck, or possibly judgement, it had been launched at the exact market peak on 29 April. And hopefully it had helped to alert companies to the difficult times that lay ahead. But by December, most analysts and […]

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Morgan Stanley says commodity supercycle a myth

Morgan Stanley’s head of emerging markets seems to share the blog’s belief that the current oil and commodity ‘supercycle’ is simply a speculative frenzy. Writing in the Financial Times, Ruchir Sharma notes: “The daily news about falling oil prices is the beginning of a major shift in the global economy: the end of the “commodity […]

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Another Minsky Moment may be approaching

The global economy is now in the middle of its 3rd downturn in the past 4 years. The chart above shows how the blog’s benchmark products have acted as leading indicators on each occasion (yellow highlight): • In 2008, naphtha (red line) PTA (purple), benzene (green) and polyethylene (PE, blue) all peaked around the middle […]

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Financial markets rally as real economy weakens

Petrochemical markets continue to provide plenty of warning signs about the deteriorating state of the global economy. As the above chart shows of price movements since January, even benzene is now weakening as supply disruptions fade. The obvious conclusion is that downstream users have simply been unable to pass through recent increases. Instead, these further […]

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