Oil markets

The energy transition powers ahead, as Electric Vehicle 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.

The energy transition powers ahead, as Electric Vehicle sales continue to ramp up Read More

Clean energy set to squeeze fossil fuel demand as ‘the electrification of everything’ continues

Portugal is showing the way. Despite 6 months of drought last year, 57% of its electricity came from renewables. And its clean energy focus means it is becoming “one of the cheapest markets in Europe”. CO2 emissions will also have reduced by 75% in 2030 versus 2021.

Clean energy set to squeeze fossil fuel demand as ‘the electrification of everything’ continues Read More

Oil markets enter the endgame as car companies rush to electrify

Almost every day now sees a car company rushing to announce its plans to boost Electric Vehicle (EV) output. And key OPEC members – such as the UAE – are starting to recognise they have only a few years left to sell their oil, before the market disappears. Last May, the influential International Energy Agency

The post Oil markets enter the endgame as car companies rush to electrify appeared first on Chemicals and the Economy.

Oil markets enter the endgame as car companies rush to electrify Read More

Friends of the Earth v Royal Dutch Shell – what did the Dutch Court rule, and what does it mean for Shell’s business?

My Dutch colleague, Daniël de Blocq van Scheltinga, is a graduate of Leiden University in the Netherlands, with a Master of Law degree and a specialty in International law. Here he gives his expert view on the Dutch court’s decision to order Shell to reduce its CO2 emissions by at least 45% , relative to

The post Friends of the Earth v Royal Dutch Shell – what did the Dutch Court rule, and what does it mean for Shell’s business? appeared first on Chemicals and the Economy.

Friends of the Earth v Royal Dutch Shell – what did the Dutch Court rule, and what does it mean for Shell’s business? Read More

Oil markets, OPEC, enter the endgame for the Age of Oil

2 major events shocked oil markets last week. They marked the start of (a) the endgame for the Age of Oil and (b) the paradigm shift to the Circular Economy and the new Age of Energy Abundance.  The new ‘Net Zero by 2050’ report from the International Energy Agency (IEA) was the first shock: It

The post Oil markets, OPEC, enter the endgame for the Age of Oil appeared first on Chemicals and the Economy.

Oil markets, OPEC, enter the endgame for the Age of Oil Read More

Iran highlights OPEC’s dilemma on output cuts

Saying you “won’t do something” may stop you digging a bigger hole for yourself. But it doesn’t help in deciding what you should do instead. That’s OPEC’s dilemma today on raising oil output. Everything seemed simple enough a year ago, as the pandemic took hold: Saudi Arabia’s first reaction was to assume it would have

The post Iran highlights OPEC’s dilemma on output cuts appeared first on Chemicals and the Economy.

Iran highlights OPEC’s dilemma on output cuts Read More

A new recession era to emerge

Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the more it will expose the underlying fragility of today’s debt-laden global economy. Companies therefore have to move into crisis management mode, with a number of key areas requiring immediate attention: • Employee health and safety is the top priority. Governments are slowly waking

A new recession era to emerge Read More

Oil market weakness suggests recession now more likely than Middle East war

Oil markets remain poised between fear of recession and fear of a US attack on Iran. But gradually it seems that fears about a war are reducing, whilst President Trump’s decision to ramp up the trade war with China makes recession far more likely. The chart of Brent prices captures the current uncertainties: It shows

Oil market weakness suggests recession now more likely than Middle East war Read More

Recession risk rises as Iran tensions and US-China trade war build

Oil markets are once again uneasily balanced between two completely different outcomes – and one again involves Iran. Back in the summer of 2008, markets were dominated by the potential for an Israeli attack on Iranian nuclear facilities, as I summarised at the time: “Nothing is certain in life, except death and taxes. But it

Recession risk rises as Iran tensions and US-China trade war build Read More

Oil prices flag recession risk as Iranian geopolitical tensions rise

Today, we have “lies, fake news and statistics” rather than the old phrase “lies, damned lies and statistics”. But the general principle is still the same.  Cynical players simply focus on the numbers that promote their argument, and ignore or challenge everything else. The easiest way for them to manipulate the statistics is to ignore […]

The post Oil prices flag recession risk as Iranian geopolitical tensions rise appeared first on Chemicals & The Economy.

Oil prices flag recession risk as Iranian geopolitical tensions rise Read More

Saudi oil policy risks creating perfect storm for Aramco flotation

Good business strategies generally create good investments over the longer term. And so Aramco needs to ensure it has the best possible strategies, if it wants to maximise the outcome from its planned $2tn flotation. Unfortunately, the current oil price strategy seems more likely to damage its valuation, by being based on 3 questionable assumptions: Oil […]

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Saudi oil policy risks creating perfect storm for Aramco flotation Read More

Economy faces slowdown as oil/commodity prices slide

Oil and commodity markets long ago lost contact with the real world of supply and demand. Instead, they have been dominated by financial speculation, fuelled by the vast amounts of liquidity pumped out by the central banks.  The chart above from John Kemp at Reuters gives the speculative positioning in the oil complex as published […]

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Economy faces slowdown as oil/commodity prices slide Read More

Saudi Arabia’s ‘Vision 2030’ is looking a lot less clear

Saudi Arabia’s U-turn to revive oil output quotas is not working and fails to address the changing future of oil demand, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Saudi Arabia’s move into recession comes at an unfortunate time for its new Crown Prince, Mohammed bin Salman […]

The post Saudi Arabia’s ‘Vision 2030’ is looking a lot less clear appeared first on Chemicals & The Economy.

Saudi Arabia’s ‘Vision 2030’ is looking a lot less clear Read More

Oil market supply/demand finally begins to matter again as commodity funds withdraw

Its been a long time since oil market supply/demand was based on physical barrels rather than financial flows:   First there was the subprime period, when the Fed artificially boosted demand and caused Brent to hit $147/bbl   Then there was QE, where central banks gave free cash to commodity hedge funds and led Brent to hit […]

Oil market supply/demand finally begins to matter again as commodity funds withdraw Read More

Hurricane Harvey: lack of insurance will hit Houston’s recovery

“By Monday, the third straight day of flooding, the aftermath of Hurricane Harvey had left much of the region underwater, and the city of Houston looked like a sea dotted by small islands.  ’This event is unprecedented,’ the National Weather Service tweeted. ‘All impacts are unknown and beyond anything experienced.’” This summary from the New […]

Hurricane Harvey: lack of insurance will hit Houston’s recovery Read More

Oil price weakness will unmask reflation and recovery myth

Oil markets have been at the centre of the recent myth that economic recovery was finally underway.  The theory was that rising inflation, caused by rising oil prices, meant consumer demand was increasing.  In turn, this meant that the central banks had finally achieved their aim of restoring economic growth via their zero interest rate […]

Oil price weakness will unmask reflation and recovery myth Read More

Oil prices under pressure as US oil/product exports ramp up

On Monday, I discussed how OPEC abandoned Saudi Oil Minister Naimi’s market share strategy during H2 last year. Naimi’s strategy had stopped the necessary investment being made to properly exploit the new US shale discoveries. But this changed as the OPEC/non-OPEC countries began to talk prices up to $50/bbl. As CNN reported last week: “Cash is pouring […]

Oil prices under pressure as US oil/product exports ramp up Read More

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 […]

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

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 […]

Oil prices could halve as the speculative bubble starts to burst Read More

Futures markets, US shale, the big winners from OPEC meeting

There were only two winners from the past 3 months of OPEC’s “Will they?, Won’t they?” debate on output cutbacks. Iran wasn’t one of them – although the talks did emphasise its renewed ability to control the OPEC agenda.  Nor was Saudi Arabia, forced to accept the lion’s share of the proposed cutbacks. Instead, the […]

Futures markets, US shale, the big winners from OPEC meeting Read More

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 […]

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

ExxonMobil, Saudi Arabia, differ on oil outlook – or do they?

If asked about the outlook for prices, oil company CEOs normally duck the question.  And they certainly never disagree in public with Saudi Arabia, the world’s leading oil producer.  This is what makes the recent speech by ExxonMobil CEO, Rex Tillerson, so interesting: “I don’t quite share the same view that others have that we are somehow […]

ExxonMobil, Saudi Arabia, differ on oil outlook – or do they? Read More

Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter

Once upon a time, oil markets were based on facts.  Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]

Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter Read More

Wrong assumptions on China growth and oil prices mean danger lies ahead for refiners and polymer producers

It could be a very difficult H2 for anyone involved in the Asian oil and polymer markets.  And given the global importance of these markets, everyone around the world will also feel the impact.  The issue is that most business strategies have been based on 2 increasingly unlikely assumptions:   Companies all assumed that oil […]

Wrong assumptions on China growth and oil prices mean danger lies ahead for refiners and polymer producers Read More

Saudi plans to transform Aramco to energy /industrial company

“Within 20 years, we will be an economy that doesn’t depend mainly on oil“. With that one statement, deputy Crown Prince Mohammed bin Salman (pictured above), changed the outlook for oil and energy markets.  The world’s major oil producer, with the lowest cost, was signalling that the kingdom will no longer be supply-driven, focused on […]

Saudi plans to transform Aramco to energy /industrial company Read More

Oil market rally under threat as Doha meeting fails to agree

Yesterday’s failure of the Doha oil producers meeting will hopefully reintroduce a note of sanity into oil markets.  After all, Saudi leaders have made it clear, time and time again, that they were no longer interested in operating a cartel where they take the pain of cutting production, and everyone else gains the benefit of […]

Oil market rally under threat as Doha meeting fails to agree Read More

Hedge funds exit oil price rally as Saudi plans post-oil economy

“Within 20 years, we will be an economy or state that doesn’t depend mainly on oil“. This critical statement from Saudi Arabia’s deputy Crown Prince has been lost in the hype surrounding Q1′s hedge fund-inspired rally in oil, commodities and Emerging Markets.  There has seldom been a better example of markets failing to see the […]

Hedge funds exit oil price rally as Saudi plans post-oil economy Read More

Oil market speculators profit as central banks hand out free cash

Oil markets are entering a very dangerous phase.  Already, many US energy companies have gone bankrupt, having believed that $100/bbl prices would justify their drilling costs.  Now the pain is moving downstream. The problem is the central banks.  Hedge funds have piled into the oil futures markets since January, betting that there would be lots […]

Oil market speculators profit as central banks hand out free cash Read More

IEA says market “awash with oil” – debunks bullish myths

Oil markets are the proverbial “canary in the coalmine”.  They are showing us what happens when the rose-tinted glasses provided by stimulus policy are removed.  Now markets have to return to their true role of price discovery, based on the fundamentals of supply and demand. This makes them very dangerous indeed.  Some large players in […]

IEA says market “awash with oil” – debunks bullish myths Read More

Prepare for $10-$15/bbl oil as Iran, US return to the market

Oil markets finally entered their “give-up phase” last week.  Amazingly, it is now nearly 18 months since the start of the Great Unwinding of policymaker stimulus in August 2014, when Brent was still $105/bbl.  On Friday night Brent closed at $29/bbl.  As ICIS Chemical Business (ICB) notes in its latest editorial: “International eChem’s Paul Hodges […]

Prepare for $10-$15/bbl oil as Iran, US return to the market Read More

Oil hits $30/bbl – and suddenly, analysts forecast lower prices

Yesterday, oil prices reached my long-held $30/bbl forecast level.  And suddenly, it seems, all the leading analysts have begun to forecast lower oil prices.  As Reuters reported: “Adjusting to the price rout, analysts have been shifting their price outlooks downward, with Barclays, Macquarie, Bank of America Merrill Lynch, Standard Chartered and Societe Generale all cutting […]

Oil hits $30/bbl – and suddenly, analysts forecast lower prices Read More

Chart of the Year – Oil prices return to natural gas linkage

Last year’s ‘Chart of the Year’ was headlined “China’s auto sales bubble begins to burst“.  Few would disagree with this view today.  Similarly, there is little doubt about 2015′s Chart of the Year.  It has been the focus of industry and analyst attention all year: Those who believed that argument that the world faces an […]

Chart of the Year – Oil prices return to natural gas linkage Read More

Oil price forecasts based on myths, not proper analysis

Did your company or investment manager use $50/bbl as a forecast Scenario price for oil this year?  If not, why not?  And has this question even been asked, as you finalise forecasts for 2016? In recent months, many readers have told me despairingly of their efforts to suggest alternative Scenarios to last year’s “consensus” view […]

Oil price forecasts based on myths, not proper analysis Read More

Algorithms drive oil prices up 6%, yet fundamentals remain weak

It only took 2 days for a shocking example to confirm my concern on Monday about the volatility being created by central bank stimulus: As the Wall Street Journal (WSJ) chart shows, a major oil price move took place early in Wednesday’s trading US WTI oil had been trading below $44/bbl, when suddenly prices jumped from […]

Algorithms drive oil prices up 6%, yet fundamentals remain weak Read More

Impact of $25/bbl oil – free pH Report webinar next Tuesday

The consensus failed to forecast last year’s oil price collapse.  So is today’s conventional wisdom correct to suggest that prices will now stabilise at current levels and then move higher? We focus on this critical issue in this quarter’s free webinar from The pH Report: The potential for $25/bbl to be the “new normal” for […]

Impact of $25/bbl oil – free pH Report webinar next Tuesday Read More

Oil heads to $30/bbl as Great Unwinding reaches 1st anniversary

Global markets are becoming ever more complex as the Great Unwinding of stimulus policies continues.  This means that each blog post is now taking much longer to write.  It therefore seems sensible to focus on writing 3 posts each week – on Monday, Wednesday and Friday – in order to continue to provide the highest possible […]

Oil heads to $30/bbl as Great Unwinding reaches 1st anniversary Read More

Iran deal highlights “massively oversupplied” oil market

The oil market was the first to feel the impact of the Great Unwinding of policymaker stimulus nearly a year ago.  It had completely lost its key role of price discovery due to the liquidity being supplied by the central banks.  This had overwhelmed the fundamentals of supply/demand.  And we are still living with the consequences […]

Iran deal highlights “massively oversupplied” oil market Read More

New oil price fall is matter of “when”, not “if”, as inventory builds

Financial players have become convinced in recent months that the oil price will rise.  And so far, this has been a self-fulfilling prophecy.  Their buying has led to oil being stored all over the world – in tankers floating at sea and in shale oil wells, as well as in storage tanks. Unsurprisingly, prices have […]

New oil price fall is matter of “when”, not “if”, as inventory builds Read More

US Marcellus gas output trebles as drilling rig count halves

Simple stories aren’t always true.  That’s certainly the case with the fiction that the fall in the number of US oil drilling rigs will soon reduce US oil production. Exxon Mobil CEO Rex Tillerson recently reminded us of this critical point: “Clearly a significant decline in rig activity did not diminish the continued growth of […]

US Marcellus gas output trebles as drilling rig count halves Read More

OPEC hit as ‘peak oil demand’ arrives and US imports fall

Oil market traders have been having fun in recent weeks, as they have managed to create guaranteed price movements every week: US oil inventory data is published on Tuesday and Wednesday This gives traders the chance to push prices lower as the inventories continue to rise US oil rig data is published on Friday This creates the chance to […]

OPEC hit as ‘peak oil demand’ arrives and US imports fall Read More

Hedge funds moving away from ‘buy on the dips’ strategy

In recent years, financial markets have believed that “everything is for the best in this best of all possible worlds“.  Good news has taken markets higher.  So has bad news – as investors assume policymakers will apply more stimulus. As a result, a whole generation of managers and analysts has grown up without having to learn the fundamentals of supply/demand analysis.  And […]

Hedge funds moving away from ‘buy on the dips’ strategy Read More

Oil price, China Outlook – free pH Report webinar tomorrow

There have so far been 3 stages to the oil price collapse since I first forecast this development in mid-August: The first stage saw prices reach my initial forecast target of $70/bbl in November They then fell further to reach my second price target of $50/bbl in January Since then, prices have been trading in a wide range. Daily moves of $2/bbl, […]

Oil price, China Outlook – free pH Report webinar tomorrow Read More

Oil price rally a “Head Fake” says International Energy Agency

Why wouldn’t oil prices return to their long-term average around $30/bbl?  After all,  the world is facing a long-term energy supply glut.  The latest monthly report from the International Energy Agency (IEA) confirms my view that the recent rally has simply been a trading coup: “HEAD FAKE “Behind the façade of stability, the rebalancing triggered by the price […]

Oil price rally a “Head Fake” says International Energy Agency Read More

Oil prices have further to fall as US inventory hits new records

Another week, and another record high for US oil inventories.  Oil prices clearly have some way to go, before they return to being based on the fundamentals of supply and demand. Thankfully, the looking-glass world of $100/bbl prices has finally begun to shatter over the past 9 months.  And we can expect prices to return to historical […]

Oil prices have further to fall as US inventory hits new records Read More

Saudi lets ‘market decide’ on oil prices to maximise local jobs

I was kindly invited last week to give a keynote address at the annual ME-TECH conference in Dubai.  Naturally, there was intense interest in my argument that oil prices were most unlikely to recover to the $100/bbl level. Instead, I suggested they would likely return to their long-term historical average of $33/bbl (in $2014).  And I argued that this would be good news […]

Saudi lets ‘market decide’ on oil prices to maximise local jobs Read More

The world of $100/bbl oil is unlikely to return

Chemical markets are continuing to signal that the world faces major economic challenges in 2015.  The chart above highlights developments since August, when I first forecast that oil prices would see major falls, and that the value of US$ would see ”a strong move upwards“: Benzene, always my favourite indicator for industrial output, has suffered worst, down 56% (green) Brent […]

The world of $100/bbl oil is unlikely to return Read More

Oil market faces “historic shift” – International Energy Agency

The above chart highlights one major reason behind my forecast last August that oil prices were about to collapse.  This was that US inventories were so high, storage was starting to run out: Inventory had reached all-time record levels, and was at around 60 days of sales (blue area) And so prices simply had to fall, to […]

Oil market faces “historic shift” – International Energy Agency Read More

IEA says oil price collapse could lead to “social upheaval or financial difficulties” in H1

Today’s collapse of commodity prices has the potential to cause a major financial crisis, as I first suggested back in June.  In fact, this would now be my Base Case.  But companies and investors have been lulled into complacency by unthinking ‘conventional wisdom’. This simply ignored the obvious fact that record levels of commodity prices could only […]

IEA says oil price collapse could lead to “social upheaval or financial difficulties” in H1 Read More

Oil prices continue bouncing down the stairs to lower levels

Brent oil prices have reached the “$70/bbl and probably lower” level that I forecast in August.  So we now need to think about where they go next.  Luckily, the chart above can still guide us, as it has done since September 2010. As readers will remember, I first forecast the collapse on 18 August.  I then followed this post with a detailed analysis […]

Oil prices continue bouncing down the stairs to lower levels Read More

Gulf countries risk losing US defence shield if oil prices stay high

I imagine a version of this chart has been keeping ministers awake at nights in Riyadh and the other Gulf Co-Operation Countries (GCC) in recent months.  “How did we ever allow Canada to supply more oil than OPEC to the US?” they must be worrying. ”What did we think we were doing?” This might not be quite […]

Gulf countries risk losing US defence shield if oil prices stay high Read More

OPEC’s high prices have accelerated move away from oil to gas

Does OPEC have a future?  Or has it already disappeared as an effective force in oil markets?  I am not the only one now asking this question.  Saudi Oil Minister Ali al-Naimi asked the same question in the summer, suggesting OPEC Ministers should instead meet once a year, and have occasional videoconferences, adding: “We don’t need a meeting. […]

OPEC’s high prices have accelerated move away from oil to gas Read More

Financial players have destroyed price discovery in oil markets

Oil prices should be set by the balance of supply and demand.  But as the chart shows, oil markets have instead become dominated by financial players, as pension and hedge funds decided to buy oil as a “store of value“. Before 2000, financial market volume (red line) had been roughly equal to annual oil production (green line).  This worked well, providing physical […]

Financial players have destroyed price discovery in oil markets Read More

Why did nobody else forecast that the oil price would collapse?

Brent oil prices closed at $104.71/bbl on Friday 15 August.  On the following Monday morning, I published the first post in my Great Unwinding series, arguing that: “The Great Unwinding of the failed stimulus policies since 2008 has now begun…oil markets are starting to follow cotton and other commodities in refocusing on the fundamentals of supply and […]

Why did nobody else forecast that the oil price would collapse? Read More

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World Aromatics and Derivatives Conference next week

Our 13th annual World Aromatics & Derivatives Conference takes place in Berlin next week.  Jointly organised as always by International eChem and ICIS, it features a must-hear list of speakers: ExxonMobil:  Europe Business Director Tim Stedman will give a global market overview Dow Chemical: Global Business Director Pieter Platteeuw will discuss the future for benzene […]

World Aromatics and Derivatives Conference next week Read More

Saudi oil policy shaped by defence dependence on USA

The world now faces a supply glut in almost every source of energy, including oil, gas and coal.  It is also seeing major increases in output of key products including gasoline, diesel and petrochemicals.  Yet as the International Energy Agency has warned, “the recent slowdown in demand growth is nothing short of remarkable.” The blog is therefore launching today a 3-part series […]

Saudi oil policy shaped by defence dependence on USA Read More

Europe unprepared for hard winter without Ukraine gas

There is an alarming naivety about Western policymakers’ response to events in the Ukraine.  They have simply chosen not to recognise that Russia’s strategic objectives are no longer about building links with Europe, but are instead about creating a Eurasian Economic Union (EEU). Thus they assume that Russia will always put its economic interests ahead of its political objectives.  And […]

Europe unprepared for hard winter without Ukraine gas Read More

Could the oil price triangle be close to cracking?

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.  […]

Could the oil price triangle be close to cracking? Read More

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 consumption growth has slowed as prices have stayed high Read More

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 […]

Oil price costs remain close to 5% of global GDP Read More

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 […]

ExxonMobil Antwerp to spend $1bn boosting diesel capacity Read More

Oil will be left in the ground, as gas gains energy market share

The annual BP Energy Statistics publication is a treasure trove of information for anyone interested in global energy markets.  One key area is the impact of today’s higher oil prices on consumption growth, as highlighted in the chart: It starts from 1965, and shows consumption growth for oil (red line), gas (blue) and total energy (green) Oil’s […]

Oil will be left in the ground, as gas gains energy market share Read More

Europe faces Russian gas and oil supply risk over Ukraine

History shows that that governments usually lose arguments with energy suppliers.  UK premier Harold Macmillan summed up the position when talking about coal miners in the 1950s, warning: “There are three bodies no sensible man directly challenges: the Roman Catholic Church, the Brigade of Guards and the National Union of Mineworkers” Unfortunately, Europe now potentially faces an argument with its leading gas […]

Europe faces Russian gas and oil supply risk over Ukraine Read More

European oil travels the world as market complacency increases

The blog has a suggestion for a quiz question for anyone planning party games over the Christmas period: Q.  What was the longest distance travelled by a cargo of crude oil in 2013? A.  9000 km (5500 miles) from Scotland to China Isn’t that amazing?  We are constantly being told that supply is short, and that today’s high prices are […]

European oil travels the world as market complacency increases Read More

Iran talks offer hope on oil prices

Iran has been at the centre of all the major oil market price spikes in the past few decades: Today’s record prices on an annual basis are partly due to market fears over supply disruptions due to the Iran/Israel nuclear issue Fears over a nuclear showdown also led prices to jump to $150/bbl in July 2008, when the […]

Iran talks offer hope on oil prices Read More

Oil market hype fails to take prices out of their triangle

Pity for a moment those poor souls whose income depends on finding ever-more creative ways of justifying today’s record levels of oil prices.  One by one, all their favourite stories have disappeared.  Even the traditional summer warnings of record hurricane disruption have so far failed to deliver. How different it is from the start of the crisis, when the […]

Oil market hype fails to take prices out of their triangle Read More

"Its the oil price, stupid!"

Famously, when Bill Clinton ran his successful presidential campaign in 1992, his advisers would remind him of the key message with just one phrase “Its the economy, stupid!”. Today’s policymakers would do well to maintain a similar focus on the oil p…

"Its the oil price, stupid!" Read More

V is for Volatility

Unilever CEO Paul Polman suggests we are living in a VUCA world, as we discuss in chapter 11 of Boom, Gloom and the New Normal. Volatility, Uncertainty, Complexity and Ambiguity make planning for the future more difficult than for a generation.

Th…

V is for Volatility Read More

The Downturn arrives

It is 5 months since the blog launched its IeC Downturn Alert, using prices from 29 April. It wrote then that:

“They don’t ring bells at market turning points. Otherwise, we could all retire to the Bahamas.”

But its argument was that a peak was li…

The Downturn arrives Read More

2012 Budgets

The blog will publish its fifth annual Budget Outlook next weekend. As usual, it is therefore time to review last year’s Outlook. Past performance may not be a perfect guide to future outcomes. But it is one of the best that we have.

The blog’s 2008 O…

2012 Budgets Read More

Time to confront reality

Peggy Noonan is the blog’s favourite political correspondent. She used to be President Reagan’s speechwriter, so nobody can accuse her of being a ‘socialist’ or ‘doomsayer’.

Recently, she has been writing some very important columns in the Wall Stree…

Time to confront reality Read More

US auto sales remain flat

The good news about US auto sales last month was that they were the highest September sales since 2007. The bad news was that they were still below the 1.1 million level, which was the minimum monthly sale from 2005 – August 2008.

The reasons for the …

US auto sales remain flat Read More

Time for leadership at EPCA

The chemical industry has a turnover of $3.4trn, and is the world’s 3rd largest industry. It matters to the global economy.

Many of its leaders are about to meet next weekend in Berlin for the annual European Petrochemical Association (EPCA) meeting….

Time for leadership at EPCA Read More

Budgeting and the New Normal

Companies are now starting the Budget process for 2012-14.

As always, the blog will present its own view next month. It will also review last year’s Budget Outlook, presciently titled ‘Budgeting for Uncertainty’.

In the meantime, companies might l…

Budgeting and the New Normal Read More

August highlights

Many readers have been taking a well-earned break over the past few weeks. The blog also continues to gain large numbers of new readers, as the financial crisis intensifies. As usual, therefore, it is highlighting key posts during August, to help you…

August highlights Read More

The New Normal World in 2021

All of us would love to be able to see into the future.

Chapter 4 of our new free eBook, ‘Boom, Gloom and the New Normal’, does just this.

It offers 10 predictions about how the world will look in 2021:

1. Young and old will be focused on ‘needs’…

The New Normal World in 2021 Read More

Investment banks reportedly dominated oil trading in US futures markets as prices spiked in June 2008

The investment banks have maintained a consistent focus on oil market supply disruptions and demand surges in recent years, alongside forecasts of sharply increasing prices. We discussed their role in more detail in the recently published Chapter 3 of…

Investment banks reportedly dominated oil trading in US futures markets as prices spiked in June 2008 Read More