Helping you navigate the new normal since 2001
European and Asian buyers need to worry about whether US exports of transport fuels will continue in the autumn as the US midterm elections loom. The risk is that the White House won’t want the domestic market to go short to support exports.
Oil product shortages and price hikes seem inevitable as Gulf War moves into 6th month Read More
Two major wars are underway in Europe and the Arabian Gulf. The IEA continues to warn that they have already created “the largest energy supply disruption in history”. And now, it seems financial markets are waking up to the major risks created by the $2.6tn AI bubble
If Trump now walks away, he will leave Iran with control of Hormuz. But he will need a lot of ‘boots on the ground’ to invade a country of 93 million people.. As history confirms, air power alone is unlikely to win the war
Brent returns to $100/bbl, with 25% of global output now impacted by war Read More
We are nearing crunch time for vital energy supplies of transport fuels and natural gas. Europe’s gas storage for the winter was just 28% full when refilling for the winter began in April. And around the world, energy supplies are getting tighter by the day.
Hormuz fighting, Russia’s fuel crisis, highlight risks to global fuel and gas supplies Read More
There are major upside risks on crude oil and product pricing as we head into H2. Inventories are very low, with no margin for error. And nobody knows whether the current US-Iran talks will actually end in a long-term agreement.
Major upside risks remain for oil and product pricing in H2 Read More
Oil companies are warning that “the US Strategic Petroleum Reserve is going to be precariously low. What comes next is higher prices. We are getting closer to the bottom. July is likely the pain point when the market turns.”
Hormuz closure pressures global oil reserves and food supplies Read More
The World Bank, IMF, IEA and WTO have all warned that the crisis risks spiralling out of control:
“If shipping flows do not return to normal, continued rapid depletion of global oil inventories ahead of peak summer oil demand in the Northern Hemisphere would present increasing risks for fuel security, market conditions, and broader economic resilience.”
Global risks rise as Hormuz remains shut and supply chains start to buckle Read More
US inflation risks are rising as the Hormuz closure enters its 4th month. Inflation rose to 3.8% in April. It was just 2.4% in February before the US/Israel war began. And the upward trend is set to continue
US inflation risks rise as Hormuz closure enters 4th month Read More
Financial markets are assuming the Strait will reopen this month, and free passage resume in June. If this is delayed, the risks of a global downturn to rival 2008 are rising.
Hopes rise for an early return to free passage in the Strait of Hormuz Read More
Petrochemical prices are warning of major inflation risks ahead due to the crisis in the Strait. They confirm we need to move back to a world of ‘local-for-local’ supply chains. The question is how quickly these can be put in place?
Petchem price rises confirm inflation risk as Strait of Hormuz remains closed Read More
As with Covid in March 2020, a ‘wake-up call’ is now about to hit most Western governments. Critical oil and gas-based products are at increasing risk of becoming unaffordable, or unobtainable.
Oil and product prices set to be ‘higher for longer’ as Hormuz remains closed Read More
The IMF is warning that “Heightened macro risks and the prospect of tighter monetary policy could trigger a sudden repricing by financial markets—with much lower asset valuations, higher risk premia, more capital flight, and dollar appreciation”.
IMF warns on inflation and recession risks, as Iran war continues Read More
Europe is facing its first major supply crisis, on jet fuel. Prices have already doubled. And now the IEA is warning, “Several European countries may start to face shortages of jet fuel in the next 6 weeks”.
Iran war starts to threaten key parts of the global economy Read More
The history of energy crises suggests that today’s supply chain surge will likely be followed by recession. Buyers will suddenly start destocking again, as they realise consumer demand was actually slowing, whilst they were busy increasing inventory.
We are likely entering a very difficult few months. As the IEA warns, major changes in our lifestyles will be needed unless the war ends soon and the Strait of Hormuz reopens.
The biggest energy supply shock in history has reached the one-month mark Read More
The Strait of Hormuz has never been closed before. So we are in uncharted waters. And President Trump’s plan to provide naval escorts to reopen it, creates a new element of risk. What would happen if an Iranian drone hit a US warship?
Middle East turmoil highlights risks to energy and food supply – and Saudi’s water Read More
Chemical company results are confirming the severity of the crisis. If Europe wants to maintain a viable chemical industry, it therefore needs to accelerate its proposed Industry Acceleration Act. Hopefully, it will be published this week, and action will follow very quickly
Chemical company results confirm scale of industry crisis Read More
As the BBC warns: “The greatest danger now is that President Trump, having amassed this powerful force close to Iran’s borders, decides he must act or lose face, and a war begins with no clear end-state and with unpredictable and potentially damaging repercussions.”
If Europe’s chemical industry disappears, the whole economy will be at risk. This week’s Antwerp Summit needs to focus on kick-starting its recovery.
Antwerp EU Summit holds key to Europe’s chemical industry future Read More
Chemicals contribute to 96% of manufactured goods. So if the Commission and governments don’t now provide major support at this time of crisis, the whole European economy will be at risk.
Europeans are the only ones still operating on the basis of a rules-based international order. As France’s President Macron warned last week, we have to be much more realistic. We need “to protect our chemical industry, our industries – because they are being literally killed.”
INEOS bond price slide confirms chemicals are in Crisis Read More
US automakers have been around a long time. It is too early to write them off. But Trump’s EV restrictions and their lack of robotaxi options suggests they risk running out of road sooner rather than later.
US automakers running out of road due to lack of EV and robotaxi options Read More
The key issue is that demand growth is slowing due to the rise of the Perennials 55+ generation. They are a ‘replacement economy’. And the major disruption underway in trade patterns increases the risk of buying imports.
Services become key as markets return to a more local-for-local focus Read More
Oil prices seem likely to continue under pressure. Inventories are at near-record levels. President Trump’s Trade War is slowing the global/US economy. And his Gaza peace deal creates the potential of a new Iran nuclear deal. Houthi attacks in the Red Sea may also reduce
Today’s oil market appears calm – but risks are rising under the surface Read More
Companies have to focus on managing the things they can control. Essentially, this involves a return to the national/regional business model that operated until 1989
Survival is the first priority for European chemicals Read More
As the EU Commission President warned earlier this month, “Battlelines for a new world order based on power are being drawn right now. Yes, Europe must fight.”
The chemicals industry is key to winning this fight. It is now time for governments to step up and support it.
The good news is that we do know what needs to be done. But so far, the necessary sense of urgency is missing at government level. The industry can’t afford another 2 years of talking. It needs action and support now, if it is to survive.
European chemical companies face critical decisions about their future Read More
It would seem prudent to plan for further escalation of the military and trade wars in H2. Countries will likely continue to join trading blocs to counter Trump’s tariff war. And defence spend will further increase as the Middle East/Ukraine wars escalate
Middle East and Ukraine wars add to trade war risks for the global economy Read More
Roman Emperors used to distract people with “bread and circuses”. Today, it seems Bitcoin is playing this role. The Tariff War is at major risk of repeating 1930’s Smoot Hawley Tariff Act. It introduced tariffs to “protect” the economy. And it led directly to the Great Depression.
Republicans are racing to finish the draft budget by Memorial Day at the end of the month. Bond investors can be forgiven for getting nervous about who is going to pay the bill for Trump’s tariff war and tax cuts.
President Trump’s tariff war and planned tax cuts reawaken the ‘bond vigilantes’ Read More
China is Trump’s main target. He has claimed that China will pay the extra cost. But US consumers know better. They rushed to buy in March before prices rose. Q1 US sales were up 12% as Apple flew-in 1.5m iPhones ahead of the start of the tariffs.
President Trump’s Tariff War will soon lead to empty shelves at Wal-Mart, Target, Home Depot and many other stores this month. The famous saying “Well in May and go away” might be a prudent policy for investors.
Last week, the CEOs of Wal-Mart, Target & Home Depot told Trump that “His tariff and trade policy could disrupt supply chains, raise prices and empty shelves.” They suggested the disruptions would become obvious in early May – only 2 weeks away.
Trump’s Tariff War risks empty US shelves at Wal-Mart, Target, Home Depot Read More
The key issue for your Action Plan is to focus on demand. 3 key questions dominate. Will your customers survive the Tariff War? Will your suppliers survive the Tariff War? What can you do to help them survive?
Companies have less than 90 days to plan for the Trump 2.0 Tariff War Read More
President Trump’s ‘drill, baby, drill’ policy is hoping to turn back the clock on the Energy Transition. Oil market volatility is therefore inevitable, and will add to the volatility he has created in the economy and financial markets.
Oil prices fall out of their ‘triangle’ as Trump’s trade war risks global recession Read More
The US economy is most at risk from the new policy. But President Reagan’s warning applies to every country trading with the US: “Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.”
President Trump’s trade war risks crashing the global economy Read More
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.
Brent falls out of its triangle – for the third time Read More
We are back in a world where geopolitics, not economics, drives decision-making. It is a world of shifting alliances. And so defence spending is set to be a key growth area for the future as Cold War 2.0 begins.
“The Dumbest Trade War in History. Trump will impose 25% tariffs on Canada and Mexico for no good reason.” Wall Street Journal editorial
Voter enthusiasm is usually key to election victory. And it is clear that Trump’s focus on immigration is enthusing many voters. But logic suggests that Kamala Harris’ focus on women’s reproductive rights makes her best placed to win, potentially with a larger majority than the polls suggest.
Europe faces major geopolitical threats. In the East, the EU faces an existential challenges from Russia’s Ukraine invasion and its “no limits” partnership with China. In the West, there is rising uncertainty over Donald Trump’s support for Europe if he became president
European voters rally to the centre as external threats increase Read More
Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
China’s industrial heartland of Hubei (pop 59m) and its capital Wuhan (pop 11m) have now been locked down for nearly a month as a result of the coronavirus COVID-2019 epidemic. In total, more than half of the population (760m) are
Financial markets head for (another) train crash as coronavirus starts to impact Read More
Last week, 95 year-old Harry Read repeated the jump that he and his fellow parachutists had made as the advance party for the D-Day landings. He told ITV News in a video interview that before the 1944 jump, their Commanding Officer had
The blog has now been running for 11 years since the first post was written from Thailand at the end of June 2007. And quite a lot has happened since then: There was the 2008 financial crisis, one of the
The blog’s 11th birthday – and a look forward to 2021 Read More
Interviewed for this Reuters article, I suggest today’s low levels of market volatility could be “the calm before the storm” Saikat Chatterjee and Vikram Subhedar, AUGUST 11, 2017 / 5:06 PM LONDON (Reuters) – After this week’s war of words between the United States and North Korea triggered the biggest fall in global stocks since the U.S. presidential […]
Investors ponder further shocks after North Korea jolt Read More
If you want to know what is happening to the global economy, the chemical industry will provide the answers. It has an excellent correlation with IMF data, and also benefits from the fact it has no “political bias”. It simply
The global economy’s best leading indicator forecasts a downturn Read More