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Chemicals and the Economy

Petrochemicals must face up to multiple challenges

Europe’s petrochemical sector must prepare now for the trade war, US start-ups, Brexit and the circular economy, as I discuss in this interview with Will Beacham of ICIS news  at the European Petrochemical Association Conference. With higher tariff barriers going up between the US and China, the market in Europe is likely to experience an influx of […]

US condensate exports highlight oil market weakness

Slowly but surely the myths over supposed supply shortages in the crude oil market are being exposed.  As leading US investment magazine Barron’s wrote this week: “In May, U.S. production hit its highest monthly average level since 1988 and is projected to keep rising. Domestic supplies have piled up in storage, especially on the Gulf […]

Commodities supercycle myth enters the end-game

If something seems to be ‘too good to be true’, then it usually is. This may be the learning for the world’s largest pension funds, as they plan their next moves in commodity investment. Their involvement jumped from 2009 after central banks began stimulus programmes, as the blog discussed last month. The funds were looking […]

High oil prices hit retail spending

Brent oil prices have just finished a record sequence of 240 days above $100/bbl. This was longer than the 170 days in 2008. And longer, on an inflation-adjusted basis, than in any previous period of high oil prices. In Europe, prices were actually higher than in 2008 due to the lower value of the euro […]

The oil/natural gas ratio goes parabolic

Parabolic price movements are great fun whilst they last. The dot.com technology stock boom was a great example, when prices would jump 1% or 2% a day towards its end. And then, sadly, it all collapsed. The NASDAQ technology index doubled in a year to reach 5000 during its final, parabolic run-up to March 2000. […]

Financial markets party whilst petchems remain weak

Financial markets continued their start of quarter rally last week. But their volatility amazes even seasoned observers. The US Dow Jones Index has moved at least 100 points in 57 of the last 58 days, for example, whilst crude oil jumped $3/bbl on Friday alone. Of course, the continued correlation between stock and oil markets […]

Groundhog Day again as Quarter 4 starts

The great film comedy Groundhog Day saw Bill Murray doomed to repeat the same day in his life, until he learnt to become a better person. Sadly, financial markets have yet to learn from his example. Every quarter, the investment banks produce new stories aimed at pushing stock/oil markets higher. Then high-frequency traders make $millions […]

‘Computers say buy….sell….buy….sell…’

Petchem markets are continuing to act as leading indicators for the global economy. The IeC Downturn Alert shows there was no September rebound in orders after the holiday period. October will have to bring a sudden, and powerful reversal of the downward trend. Otherwise Q4 could be very difficult indeed. Benzene, the blog’s favourite market […]

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