As discussed yesterday, energy markets are now going through major change. Many of the investment banks who led the move to higher prices post-2008 are closing their commodity trading desks and withdrawing from the markets. Equally, the physical traders recognise that trying to push prices higher, without a real geopolitical threat, is like trying to push water uphill. […]
Chemicals and the Economy
Oil consumption growth has slowed as prices have stayed high
As promised yesterday, the blog looks today at the impact of today’s high prices on oil consumption growth. As the chart, based on BP data shows, the ‘easy money’ policies of the central banks have only partially mitigated the impact of the oil price rally since 2009. Consumption growth has not fallen to the 0.8%/year level […]
Oil price costs remain close to 5% of global GDP
Oil markets have been driven by speculative excess since 2009. None of the factors that were supposed to create supply shortages have ever occurred. Markets have never even been close to scrambling for product. And the rallies are getting shorter and shorter, as this simple fact is finally being better understood. Thus traders’ most recent efforts to create […]
ExxonMobil Antwerp to spend $1bn boosting diesel capacity
When the world changes, companies either change with it or go out of business. The market for stagecoaches was never the same once cars came along. And not many students use slide rules today, now calculators are available. Usually, of course, these market changes are slow-moving. So companies often fail to respond in the hope the old world […]
55 plus – a new market
The blog’s analysis about the inevitability of slowing demand and deflation was warmly received at Euromoney’s latest Global Bond Investors’ Congress. Far fewer of this year’s attendees still believed that central banks could return the Western economy to SuperCycle growth levels. Thus its concept of the 3 Normals received a most enthusiastic response. This week has seen even greater interest develop […]
The €2bn WiFi company that wasn’t
Blog readers often travel a lot. And they certainly use WiFi. So here’s a question: Q. Do you ever remember using a WiFi service called Gowex? A. Lots of puzzled looks in response Q. Not sure? You think it might be vaguely familiar, but maybe not. Well this is what the company’s website says: “Your […]
America’s New Old 55 plus are now 38% of consumer spending
Maybe the concept that spending is related to age and income is just too simple for policy makers to understand? Could that be the reason why they insist on continuing to try to stimulate demand, despite the fact that Western and many other populations are now ageing fast? That was the blog’s thought on studying newly […]
Do you know where your polyethylene is in China?
In the late 1970s and early 1980s, New York Mayor Ed Koch fronted a series of public service TV commercials asking parents: “Its 10pm. Do you know where your children are?” The blog was reminded of this when checking China’s polyethylene (PE) import data on Global Trade Information Services for the January – May period, as shown […]
Will 2014 be a repeat of 2008, but worse?
Will 2014 turn out to be a repeat of 2008 for the US economy? 6 years ago, after all, not a single mainstream forecaster – including the IMF and World Bank – was forecasting a recession. Even in September 2008, the consensus was still confident about the economic outlook. Yet the National Bureau for Economic Research […]
EU cracker operating rates remain near record lows
An ageing population and record annual levels of oil prices create massive headwinds for Europe’s petrochemical producers. One means demand growth is much reduced from the SuperCycle. The other means these lower volumes cost more to produce. What a pity, you might say, that the industry is not part of the financial sector. Then it […]
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