As the blog discussed yesterday, central banks have now kept oil prices above the historical $10-30/bbl range for 10 years. But can they remain there forever? What might bring them back in line with the fundamentals of supply/demand? And what would be the risks if this happened? The background can be simply stated: • Investors […]
Tag Archives | crude oil prices
Since 1900, as the chart shows, oil prices have never been so high for so long as now. Until 2003, they had only been above $30/bbl for 4 years between 1979-1982, during the OPEC production cuts in the Iran crisis. But since 2004, they have been continuously above this level. The reason is the misguided […]
Have you ever wondered, as you pay your energy bill or fill the fuel tank in your vehicle, just why oil prices have risen so much on the past decade? The question occurred to the blog when reading a Reuters report of the latest Outlook from the International Energy Agency (IEA). It notes the IEA […]
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 […]
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 […]
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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.