Oil prices are heading for a second successive year of record annual prices. Last year, Brent averaged $111/bbl and it is averaging similar levels so far in 2012. History suggests this is very bad news for consumers, for companies and for the global economy. The reason is that consumers in most major economies are now […]
Tag Archives | crude oil prices
The US spent $6bn on its presidential and congressional elections this year. Apart from expressing the will of the people, it may also prove valuable if it helps to highlight the danger of allowing wishful thinking to override factual evidence on the ground. One example of this failing was last Monday’s forecast by the highly-respected […]
The blog is awarding itself and fellow-blogger John Richardson a pat on the back this morning. The reason is that investment bank Goldman Sachs, the largest player in commodity markets, has completely reversed its analysis of oil markets. They now accept our view that there is no fundamental reason for oil prices to be at […]
The US Federal Reserve and the European Central Bank have adopted new and aggressive monetary measures to try and boost US employment and stabilise peripheral Eurozone bond markets. Unfortunately, their actions are more likely to increase the chances of a deeper global downturn than to create economic growth. Their previous liquidity injections, undertaken in the […]
Markets spent last week ‘waiting for the Fed’. The high-frequency traders desperately need more cheap money, if they are to continue driving commodity and stock prices higher. And on Friday afternoon, they believed they got their wish. Brent crude oil prices jumped $1.92/bbl, and WTI $1.85/bbl. As the chart shows, the Fed’s 3 previous efforts […]
Nobody rings a bell at market tops or bottoms. Instead, one has to look for the divergences that suggest the previous trend has run its course. Today, these abound: • Western financial market volumes are low, whilst prices are rising • The same is true for oil market volumes, as the chart shows • June […]
Oil markets have weakened significantly since they fell out of their major ‘triangle’ formation earlier this month. WTI is already within the forecast $60-80/bbl range although, as the chart shows, Brent still maintains a $10/bbl premium at $90/bbl. Of course, charts can only display the change in sentiment and direction. They cannot explain why it […]
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 […]
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. […]
A blog reader has kindly forwarded an important UNCTAD paper (UN Conference on Trade and Development), analysing the growth and impact of high-frequency trading (HFT) on oil and financial markets. It provides important “new evidence regarding the financialisation of commodity markets”. These are now driven by computers which trade in micro-seconds, creating correlation trading which […]
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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.