Attention has rightly been focused on the collapse of oil prices over the past 6 months. These have further to fall, but the major part of the move must now be behind us. After all, Brent was at $104/bbl when I first forecast the move in mid-August, and closed at $56/bbl last night, so probably “only” has $20/bbl-$30/bbl further downside. […]
Tag Archives | US $
EU policymakers like to pretend that the Eurozone debt crisis was resolved by the adoption of last March’s new Treaty. An even more disturbing thought is that they might even believe their own propaganda. Who knows? But on the ground, it is crystal clear that the problems continue to multiply. Latest data from the Bank […]
The US government used to depend on China to fund its deficit. In 2006, China bought 47.4% of all US bonds issued. But last year, as the chart from the NY Times shows, China bought just 4.6%, leaving US investors to buy the rest. This is a yet another indicator of the profound changes underway […]
Oil markets are looking increasingly uncertain as we come to year-end. One example of this is a new survey of floating storage by oil brokers, Gibson. This found 42 ships in use, up from the 29 seen in September. Normal levels are just 5 – 7 vessels. Another is OPEC’s weaker discipline on quotas, which […]
Pity your poor CFO. As well as keeping cashflow positive, they are also coping with major US$ volatility. In July 2008 it was trading at $0.63: €1, but then rose 43% to $.80: €1, before declining 28% to $0.68: €1 today. The catalyst for this volatility seems to be oil price movements. As the chart […]
Does the US Treasury read the blog? Just hours after the chart below was posted, rumours began to circulate of a major government initiative to try and stabilise financial markets.
The US Fed’s decision to keep cutting interest rates is causing a major change in Asian investment behaviour. This will slow world economic growth quite significantly, and is bad news for chemical industry sales. It also means that the informal Bretton Woods II system of currency management has broken down.
Volatility has been rising in the crude oil and feedstocks markets. This is because individual players have completely different strategies. In turn, this makes it difficult for chemical companies to forecast short-term feedstock costs. It also makes it difficult to maintain margins. Last Monday, crude reached a new high of $111/bbl. Then, as the scale […]
The US$ took a major tumble yesterday, as traders decided the Bear Stearns news meant there was little risk of central bank intervention. Against the Japanese yen it fell almost 2.5% during the day, closing at ¥97.35, as shown on the chart. It also fell 2% against the Swiss Franc to SwFr 0.98, and continues […]
The US$ had now fallen through the ¥102 level, which has held since 1995, and went straight to the psychologically important ¥100 level. The dollar peaked 9 months ago at ¥124, and so it has now fallen 19%. This is dramatic by any standards. I forecast back in November that an ‘old-fashioned currency crisis’ could […]
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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.