The investment banks have maintained a consistent focus on oil market supply disruptions and demand surges in recent years, alongside forecasts of sharply increasing prices. We discussed their role in more detail in the recently published Chapter 3 of our new free eBook, ‘Boom, Gloom and the New Normal‘. As the above chart from the […]
Tag Archives | WTI
Investment banks reportedly dominated oil trading in US futures markets as prices spiked in June 2008
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 […]
They don’t ring bells at market tops, to warn about what might happen next. But the above chart may turn out to be the next best thing. It shows the relationship between WTI crude oil prices (blue line) versus LLDPE (linear low density polyethylene, red line) on China’s Dalian futures exchange. The exchange has been […]
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 […]
The obvious is rarely a winning strategy in commodity markets. Too many players have inside knowledge to allow anyone to profit from their own position. But now and again, interesting trends do emerge from following how the major players are positioning themselves. Thus the above chart from Petromatrix provides a valuable insight into the different […]
Natural gas markets, so important in relation to chemical feedstock availability and pricing, are undergoing major change as we transition to the New Normal. The Middle East, which had been in surplus, is now moving to a more balanced position in some countries, such as Saudi Arabia. But the USA, which had expected to need […]
China’s demand has been the main driver for the global chemical industry over the past year. And prices on China’s Dalian polymers futures exchange have been a key indicator of the boom. But now, the rally seems to be running out of steam. The key signs are in the above chart: • At the end […]
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 […]
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 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, […]
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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.