Finally, and far too late, policy makers are waking up to the damage that today’s high oil prices are doing to the global economy. Q1′s oil price averaged $119/bbl, just 7% below Q2 2008′s record $127/bbl ($2012). Thus Saudi Oil Minister, Ali Naimi, last week told the Financial Times: “High international oil prices are bad […]
Tag Archives | Brent oil prices
Q1 should have been a strong quarter for global petchem demand: • Buyers had to restock in the New Year, as CFOs had cut working capital for year-end reasons • In the West, Easter is delayed until April, and the USA has benefited from the warmest winter in 50 years • China’s holidays took place […]
“Two roads diverged in a yellow wood,And sorry I could not travel both“ The opening of Robert Frost’s famous poem ‘The road not taken’ aptly sums up today’s market situation:•Financial markets continue to be supported by the Fed’s Operation Twist•Petchem markets are slowing in reaction to weaker consumer spendingBoth of them cannot be right. Either […]
As regular readers know, the blog regards benzene as an excellent leading indicator for petchem markets and the global economy. Its track record since the start of the crisis in 2008 has continued to be strong. The reason is probably two-fold: • It is one of the oldest, and widely used, chemicals. In many ways […]
The March IeC Boom/Gloom Index confirms the blog’s sense that markets are sitting on a fence, waiting for something to happen. As the chart shows (blue column), it has risen back to 4.1, just at the point which divides strong from weak markets. Similarly the US S&P 500 Index (red line) is stuck at 1369, […]
The Wall Street Journal carried an interesting opinion piece on Friday, assessing current market conditions from the viewpoint of the film character, Forrest Gump. Gump’s key insight is that “Stupid is as stupid does”. Thus the Journal noted: “Oil staged its last price surge along with other commodity prices when the Fed revved up its […]
Over the past 18 months, the main investment analysts have argued that high oil prices would have no impact on the global economy. Now, new forecasts suggest their optimism has been misplaced. The chart above gives the International Energy Agency’s latest forecast of likely oil demand growth this year: • It has been reduced by […]
Dow Chemical is usually optimistic. 6 months ago, for example, it reported that “our transformed portfolio, underpinned by our cost-advantaged and flexible operations, is now performing at a new level.” Last week, however, Dow reported that Q4 operating rates were down from 81% in 2010 to 72%, and warned it faced “headwinds” in all segments […]
Markets are worryingly quiet for the start of a New Year. There is some restocking underway, but the main interest lies in the crude oil market. Since Brent peaked in April, there has been a clear pattern each month: • Prices have peaked at the start of almost every month • The only exceptions have […]
The blog is quite surprised at the mainstream media’s lack of interest in the fact that average Brent oil prices were at record levels in 2011 in real terms (adjusted for inflation). The annual average of Brent prices recorded by the US Energy Information Administration was $111.26/bbl, well above even 2008, when Brent prices peaked […]
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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.