In recent years, financial markets have believed that “everything is for the best in this best of all possible worlds“. Good news has taken markets higher. So has bad news – as investors assume policymakers will apply more stimulus. As a result, a whole generation of managers and analysts has grown up without having to learn the fundamentals of supply/demand analysis. And […]
Tag Archives | Iran
Yesterday’s post described how OPEC oil producers are seeing their export sales to the US start to disappear. But this, of course, is only one side of the story. As the chart from the Wall Street Journal shows, Saudi needs a $93/bbl oil price to balance its budget. Most of OPEC needs a higher price. Only Kuwait, UAE and Qatar need […]
Iran has been at the centre of all the major oil market price spikes in the past few decades: Today’s record prices on an annual basis are partly due to market fears over supply disruptions due to the Iran/Israel nuclear issue Fears over a nuclear showdown also led prices to jump to $150/bbl in July 2008, when the […]
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 […]
Remarkably, crude oil prices are continuing to trade in their triangle formation. As the chart shows, they tried to break out higher in recent weeks. But there was no follow-through. The high-frequency traders were clearly hoping the US Federal Reserve would announce a new round of quantitative easing (QE3), and provide the firepower for a […]
Oil prices are poised at a critical point. As the chart shows, the recent rally has taken them to the top of the triangle formation that has built up over the past decade. Players now need to decide if they are confident enough to push prices into higher ground. A lot of different reasons have […]
The International Energy Agency (IEA) confirmed the blog’s worst fears this week, with its announcement that crude oil demand actually fell by 300kbd in Q4. Not only is this “quite rare” as the IEA noted, but they went on to warn: “We’re flagging that there are clearly downside risks to the global economy and to […]
China’s surging demand led the chemical world out of recession and into boom territory. Its 53% increase in polyethylene (PE) demand between 2008 – 2010 (up 6.2 MT), was typical of the support it provided. But H1 2011 has not maintained this momentum, as the chart shows. Its PE demand was actually down 2.5% versus […]
‘Budgeting for Uncertainty’ seemed the best title for the blog’s new White Paper. And already developments in the Middle East are suggesting this could have been a wise decision. As the above chart of average annual oil prices shows, the 1970 oil price was just $1.80/bbl in nominal terms (blue dotted line), equal to $9.94/bbl […]
OPEC Oil Ministers, meeting today, have achieved 80% compliance with their announced production quotas. This is much higher than normal, and owes a lot to the hard-ball tactics played by Saudi Arabia, the world’s leading oil producer, in initially allowing prices to slip to a $32/bbl low. The blog forecast in January that OPEC would […]
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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.