The Energy Transition is well underway California can now run for weeks at a time on 100% renewables. But President Trump’s ‘drill, baby, drill’ policy is hoping to turn back the clock. Oil markets market volatility is therefore inevitable, and will add to the volatility he has created in the economy and financial markets.
Chemicals and the Economy
Brent falls out of its triangle – for the third time
Oil markets are warning of rising economic and political risk. Prudent companies and investors will be preparing for difficult times ahead, whilst still hoping for the best.
OPEC+ risks losing control of oil markets
Oil traders have built a record bearish position in oil futures, as they expect consumption growth to stay weak. So it would be no surprise at all to see prices fall towards the $50/bbl level.
Oil prices head into a warning triangle again
OPEC+ countries have been playing the geopolitical card for the past 2 years. But their output cuts have allowed US producers to gain market share, with production up 1.2mbd. The hurricane season may support prices for a while. But the risks are all to the downside.
Hurricanes and Houthis pressure global supply chains and add to inflation risk
The Houthi attacks and increased hurricane risks highlight how geopolitics are replacing economics as the key driver for decisions. Global supply chains are increasingly being replaced by local-for-local operations as producers aim to improve reliability and control costs.
OPEC+ starts to refocus on market share as demand growth weakens
OPEC would have been better advised to keep prices low to reduce non-OPEC supply. Instead, they are likely to face some difficult pricing decisions later in the year, if global growth continues to slow.
Oil and financial markets start to wake up to geopolitical reality
The oil price has rallied 22% over the past 4 months, since it bottomed at $74/bbl. And slowly but surely, traders are being forced to realise that geopolitics are replacing economics as the key driver for world markets.
The energy transition powers ahead, as Electric Vehicle (EV) sales continue to ramp up
The mobility market is repeating the transformation seen a century ago when cars replaced stagecoaches. Autos are the world’s largest manufacturing industry, employing millions of people directly and in supply chains. Those companies that learn to ride the wave will likely be very successful for years to come.
Food prices set for further rise as energy and fertilizer costs increase
Economists might like to believe that inflation is somehow a monetary phenomenon. But as we are all likely to learn to our cost over the winter, food and energy prices are critical for most people. Oil prices are already rising. And food prices are joining them.
Energy markets could be heading towards a new crisis
It’s too soon to talk of an actual energy crisis. But as the charts showing Brent oil and European natural gas prices confirm, it is certainly time to start planning for the possibility: Oil prices have recently risen 25%. And Europe risks gas shortages if there is a cold winter
Jump to page: