Saudi Arabia and the rest of OPEC may regret their decison to cut production, as this has led to a resurgence in US shale-oil production – and a further wave of innovation in shale technologies. Combine this with a slowdown in the Chinese economy and oil prices could be at $35/bbl or less by Q4 […]
Asian Chemical Connections
China Crude Imports: Low Growth Could Again Mean Fall In Oil Prices
By John Richardson RIGHT now, of course, oil prices are on the up again because of disruptions to Libyan production and confidence that OPEC will extend its production cuts. Libya might of course be a temporary factor, and it depends how you define what OPEC has actually already done, and what it might do in […]
Bricklaying In Australia And Oil Prices: Important Similarities
By John Richardson THE bricklayer came around to my house three years ago, quickly surveyed the extent of the job, drew a sharp breath, and said, “It’s going to cost you at least Aus$4,000.” And that was after a four-week wait to get a quote. How times have changed. Last week, the same bricklayer popped around […]
Oil Prices Over The Next Six Months: What You Need To Know
By John Richardson SURPRISED by the latest decline in crude prices following the US Energy Administration’s (EIA) report that more oil went in to storage last week than in any other week in 34 years? You really shouldn’t be if you have taken note of another extraordinary data set from the EIA that shows the […]
Oil Prices: When The Facts Don’t Matter
By John Richardson HERE are first of all the facts from the latest International Energy Agency (IEA) report: OPEC production hit a record high in September of 33.64m bbl/day. Iraq produced more oil than ever, while Libya reopened oil ports. Further boosting global supply levels is the fact that production in non-OPEC member Russia hit […]
The OPEC “Deal”: What It Really Means
By John Richardson THE OPEC decision to cut oil production for the first time since 2008, if indeed it does amount to a real cut in production, could end up being self-defeating. As I discussed last month, US shale oil production efficiency continues to go quite literally through the roof of most forecasters expectations. Between […]
Deflation Threatens Asia’s Ethylene-Polyethylene Link
By John Richardson AS you can see from the above chart, ever since April 1997, when we first started providing price quotes for spot Northeast Asian (NEA) high-density polyethylene (HDPE) film grade, it has been spot ethylene rather than spot naphtha prices that have driven HDPE prices. You can find the same pattern for any […]
Saudi Arabia and Oil: A Lesson For Polypropylene
By John Richardson POLYPROPYLENE (PP) producers and their customers, the plastic converters, are on the cusp of a great opportunity. Let’s start with the producers. The potential for low-priced propylene for several years to come will push PP prices down, thus giving PP the chance to gain market share from other polymers such as polystyrene, […]
Oil Market Muddle Continues Because Of Wrong Focus
CONFUSED? You will remain confused by oil markets as long as you continue to only look at physical supply and demand. Here is my long, but I think essential, historical explanation about why I think this is the root of today’s forecasting problems. And I also make no apologies for going over all ground because […]
Five Misunderstandings About Oil And Maybe A Sixth One
By John Richardson THE first misunderstanding about oil prices, which everyone now accepts was wrong, arose because people took too much notice of existing cost-per-barrel economics and so assumed that from October of last year, the US would close down huge amounts of shale-oil capacity. This didn’t happen because a.) Costs were lower than anticipated […]