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Chemicals and the Economy

Saudi Arabia calls for $75/bbl oil

The King of Saudi Arabia is the most important person in the oil industry. He controls the largest oil reserves, and is the largest single producer. Previous Kings have let their Oil Ministers do the talking at OPEC meetings, and to the world’s press. But King Abdullah, who succeeded in 2005, has recently become more […]

IEA says “world’s energy system at crossroads”

The International Energy Agency (IEA) is the global energy watchdog. Its new annual report, just published, says “the world’s energy system is at a crossroads”, and adds that “current global trends in energy supply and consumption are patently unsustainable”. As examples, it highlights: • The world will need 45 mb/d of new capacity (4 times […]

Russia’s economy stalls

A few months ago, Russia’s economy seemed to be recovering from its problems in the late 1990’s. High prices meant oil revenues were increasing, and the currency was strong. Now, the combination of the oil price collapse and the credit crunch has reversed the position. Yesterday, the central bank was forced to raise rates to […]

The “crystal blog”

The blog’s forecasting record is reviewed in ICIS Chemical Business this week. Click here if you would like a copy. The blog’s aim is to “highlight relevant information for the busy executive, and to provide relevant and actionable analysis of key issues”. The article particularly notes the blog’s willingness to challenge consensus forecasts. The blog […]

4 tips for survival

Last month, the blog titled its 2009 Outlook, Budgeting for Survival. This week, the Financial Times has begun a series on developing recession survival strategy. Its key tips are: • Manage your cash. Don’t spend money unnecessarily. • Keep a strong balance sheet. Have as little debt as possible. • Price your products/services keenly. Be […]

TOTAL focus on lower debt, higher oil prices

TOTAL have adopted a very clear strategy for surviving the downturn. The results statement today particularly highlights their success in strengthening their balance sheet. Net debt to equity now stands at just 15.4%, whilst they are “maintaining a high-level of liquidity and divesting non-strategic holdings”. TOTAL also see a need “in the short-term” to adjust […]

Asian naphtha falls below $300/t

ICIS is reporting today that Shell sold open spec naphtha to Cargill at $267 CFR Japan, for the first half of January. Normally the naphtha: crude ratio is around 9.5: 1. But with January Brent at $66/bbl, the ratio is now just 4:1. The blog can safely say we have never seen it this low […]

Oil producers at a crossroads

The blog has been thinking about last week’s leaked report from the International Energy Agency (IEA). This said that the world needs “to invest $360bn each year until 2030 to replace falling oil production and increase supply”. The IEA based this sum on a new analysis of 500 oilfields, which showed the current depletion rate […]

OPEC cuts production, worries about demand

Two main factors weigh on oil markets. The first, as PetroMatrix note in their latest weekly report, is that speculative players in virtually all commodity markets are being forced to deleverage their positions, and so “the bottom will be dependent on the end of the firesale”. The other factor is the continuing fall in demand. […]

Oil futures focus on $50/bbl for December

Futures markets are taking an increasingly gloomy view of oil demand. And over the past 2 weeks, the volume of NYMEX contracts to sell crude at $50/bbl has soared 50-fold. But so far, as the blog expected, physical prices have stabilised at the $70/bbl level in advance of OPEC’s emergency meeting on Friday. Current OPEC […]

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