The CEO of ExxonMobil, Rex Tillerson, has provided powerful support for the blog’s long-held view that oil prices are well out of line with fundamentals. He told the US Senate that: “If you said: ‘If I had access to the next marketable barrel, what would it cost?’, its going to be somewhere in the $60 […]
Chemicals and the Economy
Aromatics markets stumble
The aromatics market is a very liquid market compared to other chemical markets. It is an excellent leading indicator for industry pricing and volume trends, and forecast the current rally in April 2009. The chart above shows how Brent crude oil prices have moved since January 2009 (purple line), versus China’s prices for PTA (terephthalic […]
Super-computers party, as energy markets trade at record ratios
Something very strange has been happening to US energy prices over the past 2 years. The chart above shows the ratio between WTI crude oil pricing and natural gas: • It was between 6.0 and 13.0 for 22 years between 1986-2008, with some minor exceptions, and averaged 9.9. • Yet since January 2009, it has […]
Mubarak’s departure may weaken oil prices
History doesn’t repeat, but it sometimes rhymes. That was the insight of the famed American writer, Mark Twain. 2 weeks ago, this led the blog to highlight the similarities between the geo-political concerns then developing in Egypt, and the Israel/Iran stand-off which had marked the oil price peak in June 2008. We still cannot be […]
China’s gasoline at record highs, EU’s close to peak
Crude oil prices have been rocketing lately. In turn, they have produced the seemingly ‘strong’ year-end for the chemical industry forecast by the blog in early November. At this point, there is a clear divergence of view. The blog’s bullish friends see this as a sign of a major recovery in demand, and confidently forecast […]
Crude oil prices tumble on S&P 500 weakness
Sometimes, the blog gets lucky with its timing. A week ago, it wrote bearishly on crude oil markets, and suggested that “chemical companies need to keep a close eye on changing sentiment in financial markets”. By Friday, oil prices had tumbled 11%, as the US S&P 500 index continued to weaken from its 12 June […]
OPEC worries about weak oil market fundamentals
Back in April, the blog noted that stock markets had embarked on “their 7th bear market rally since October 2007”. So far, it has been the most impressive of them all, with the S&P 500 rising 40% between 6 March – 8 May, before falling 5% last week. And as the chart shows, crude oil […]
Financial players increase their bets on crude
Financial investors are already quite disruptive in crude oil markets. And their influence is set to grow this year. That’s the message from surveys by Barclays Global Investors and JP Morgan. $120bn is now invested in commodities as a class, with oil a major target. Even your own pension fund may be about to invest, […]
$100 crude – US manufacturing close to recession
Oil prices touched $100/bbl today, a new record in nominal and inflation-adjusted terms. At the same time, the US Institute of Supply Management (ISM) index signalled that the manufacturing sector ‘failed to grow in December’, with ‘industries close to the housing market struggling more than others’. All the ISM’s main indicators were negative, with inventories […]
5 risks to 2008 budgets
The consensus viewpoint is an easy way of keeping up to speed on a variety of issues outside one’s daily experience. But the signs are that the consensus may be leading to complacency, when it comes to the assumptions being used to finalise 2008 budgets. There are a number of areas where some new thinking […]
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