Tag Archives | OPEC

Oil market rebalancing myth looks close to its sell-by date

The myth of oil market rebalancing has been a great money-maker for financial markets.  Hedge funds were the first to benefit in H2 last year, as Reuters has reported, when: “OPEC and some of the most important hedge funds active in commodities reached an understanding on oil market rebalancing during informal briefings held in the […]

Continue Reading

Oil prices could halve as the speculative bubble starts to burst

The past few weeks have been a nightmare for the many hedge funds who gambled on higher oil prices. They obviously hadn’t realised that OPEC’s November quota agreement was most unlikely to lead to a major rebalancing of today’s vastly over-supplied market.  But as I suggested in December: “The simple fact is that the arrival […]

Continue Reading

America hits “peak gasoline” moment as demand patterns change

OPEC has a long wait ahead, if it hopes that US drivers will ever go back to SuperCycle levels of driving and gasoline consumption growth.  That’s the clear message from new data from the US Dept of Transport showing vehicle miles traveled last year.  The chart shows: □  Average number of miles driven per adult […]

Continue Reading

Speculators’ tail wags oil market dog as paper trading dominates

Trading oil markets used to be hard work. You had to talk to all the major players all the time (not just message them), and learn to judge whether they were telling the truth or inventing a version of it.  You had to watch for breaking economic and political news.  And you needed your own […]

Continue Reading

Trump and dollar strength will accelerate the Great Reckoning

Corporate debt in the Emerging Markets highlights the impact of the Great Reckoning, with the US dollar and interest rates rising, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Corporate borrowers in Emerging Markets (EMs) are now facing higher debt service and capital repayment costs, due to […]

Continue Reading

India’s currency reforms hitting ordinary people, the economy and auto/oil demand

It is now just over a month since India introduced the biggest currency reform the world has ever seen.  In a country of 1.3bn people, it abolished the 2 main banknotes (worth $207bn), that accounted for 86% of all cash in circulation. At 20:15 hours on 8 November, the government announced that the 500 and 1,000 […]

Continue Reading

OPEC move supports US oil production rise, and smart meters

OPEC is living in the past with its recent announcement of new quotas. The simple fact is that the arrival of US shale production means OPEC are no longer the swing producer, able to control the world market. The quotas will have little effect in themselves, as most of the participants will cheat.  Instead, they […]

Continue Reading

3 key questions for the oil market poker game, ahead of OPEC’s meeting

Volatility continues to dominate oil markets, as the above chart confirms.  Some weeks have seen prices move by over 18%.  These are extraordinary moves in a market which is very well supplied, with near-record inventory levels.  Some recent daily moves are equally extraordinary, with prices jumping $2.50/bbl on Tuesday. The volatility highlights the power of […]

Continue Reading

Global GDP saw record fall in 2015 – new IMF data

New data from the International Monetary Fund confirms that last year’s collapse in global GDP was even worse than first reported. As the chart shows,the fall when measured in current dollars was a record $4.7tn, versus $3.3tn in 2009.  And GDP was down 6% in percentage terms versus 5.3% in 2009: Even more worrying is […]

Continue Reading

Oil prices remain at pre-2005 levels as inventories rise

Its mid-winter in Russia, and the snow is deep in some parts of Moscow.  Meanwhile in Venezuela the economy is close to meltdown, and its hard to find even essentials in Caracas.  So it is no real surprise that this month saw their Oil Ministers head for “important discussions” in the warmer climate of the […]

Continue Reading