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Chemicals and the Economy

Oil markets prepare for post-QE2 world

The decision by S&P, the ratings agency, to put the USA’s AAA debt rating on review is a potential game-changer for US economic policy. It means that policymakers can no longer pretend the $5trn they have spent over the past 2 years on stimulus measures somehow “doesn’t count” in terms of needing to be repaid. […]

High oil prices, financial speculation, worry IEA

The IEA (International Energy Agency) is now very worried about the impact of today’s high oil prices on the global economy. Their chart above highlights the problem for the USA and EU. If oil prices average $100/bbl in 2011, then the EU (green column) will be paying more for its oil imports than in 2008, […]

China tightens lending: Saudi may pump more oil

Recent days have seen some signs that the tectonic plates under current chemical and polymer markets may be starting to shift. The most important has been the rapid rise in inter-bank lending rates in Shanghai. As the chart shows from Petromatrix, these have begun to rocket. A year ago, the rate at which banks could […]

Shell sees “supply revolution” in natural gas

Natural gas markets, so important in relation to chemical feedstock availability and pricing, are undergoing major change as we transition to the New Normal. The Middle East, which had been in surplus, is now moving to a more balanced position in some countries, such as Saudi Arabia. But the USA, which had expected to need […]

Oil prices continue to plateau

Last year, OPEC meetings led to newspaper headlines. But today’s session in Vienna seems to have slipped off the radar. Yet the oil market remains as important as ever to chemical companies. As the chart shows, the prime driver for oil prices (blue line) is still the financial market. Traders continue to believe recovery is […]

OPEC seeks to hold oil prices

OPEC Oil Ministers, meeting today, have achieved 80% compliance with their announced production quotas. This is much higher than normal, and owes a lot to the hard-ball tactics played by Saudi Arabia, the world’s leading oil producer, in initially allowing prices to slip to a $32/bbl low. The blog forecast in January that OPEC would […]

Saudi cuts oil output below OPEC quota

Saudi Arabia, the world’s largest oil producer, now seems to be moving to Phase 2 of its efforts to achieve a $75 – $100bbl price range. As the blog noted in early December, the Saudis’ initial tactic was to play ‘hardball’ within OPEC. The aim was to ensure that other countries did not try to […]

IEA revises down oil demand

The International Energy Agency (IEA) has cut its estimate of expected global GDP growth in 2009 to just 1.2%. It therefore expects the world to record its first back-to-back annual decline in oil demand since 1982/3. It says oil production last month was unchanged at 86.2mbd, despite OPEC cutbacks and the first fall in Russian […]

Middle East liquidity dries up

In the soccer world, the UAE has been making headlines this week. It is proposing to fund the first-ever £100m ($150m) transfer – of the Brazilian player, Kaka, to Manchester City. But behind the scenes, the collapse of the oil price has been playing havoc with the economies of the Gulf countries (GCC). HSBC, for […]

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