No, the headline is not an exaggeration. And it demonstrates that credit conditions remain tight for many less than stelar borrowers. From the Financial Times: In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco […]
Read more...Russia’s prime minister is not betting on a rebound in oil prices this year. From Moscow Times (hat tip reader Nivethan): Prime Minister Vladimir Putin on Monday ordered changes to this year’s federal budget to take into account the sharp drop in global oil prices, a decision that could pave the way for further spending […]
Read more...If you has only a passing interest in oil prices, it was not hard to notice the gaping price disparity between the two most widely quoted indexes, the current month Brent crude futures versus WTI (West Texas Intermediate), In the days prior to contract expiration in December, WTI traded as much as $9 below Brent. […]
Read more...The oil-rich countries of the Middle East have some advantages in pursuing the “green” energy market. First, they have pools of investment capital they can turn to this purpose. Possibly more important than access to money is that the funding sources may be willing to take a longer term horizon and lower returns than US […]
Read more...In past times of geopolitical stress, the dollar has generally rallies as investors move to safer havens. That behavior was not evident today as investors fretted about possible escalation of conflicts in the Middle East and South Asia. The euro went up a teeny bit, the yen faded slightly, the pound retreated. So where did […]
Read more...I am now wondering if Google censors posts (I use Blogger), I put this post up at 1:33 AM, and even had a reader e-mail me that the post had disappeared (with no listing in “Recent Posts” which happens if I put up a post and then remove it). I have a record that it […]
Read more...Liquefied natural gas doesn’t get much attention in the US because in aggregate, it is not a significant energy source here, and imports were at a five-year low in 2008. But supply/demand conditions has shifted dramatically overseas. The combination of depressed LNG prices and cheap shipping means that excess LNG may show up in the […]
Read more...From MarketWatch (weirdly, do not see referenced story on Wall Street Journal site, hat tip reader Scott): The Organization of Petroleum Exporting Countries has decided to cut its oil output by 4.2 million barrels a day from September levels, or 2.2 million barrels a day from current output, the Wall Street Journal reported on its […]
Read more...Although talk of deep OPEC production cuts and hopes for an auto industry rescue have given oil prices a boost, the fundamentals are far from out of the woods. Indeed, as OPEC bravely claimed demand and supply really weren’t so far out of whack (was that at effort to set the stage for a less-than-hoped […]
Read more...Although the spot oil prices and oil stocks have rallied on word of a pending 1.5-2 million barrel a day cut by OPEC in pil production, oil maven Philip Verleger says it won’t be anywhere near enough. From Platts (hat tip reader Michael): In his widely-read weekly analysis, “Notes at the Margin,” energy economist [Philip] […]
Read more...Conventional wisdom is that the plunge in commodities was due in part to the deflating of a speculative bubble, the balance the result of the nasty contraction now in full force. Once things recover, basic materials should enjoy a strong rebound as China and other emerging markets get back on the growth path. Comparisons to […]
Read more...One robin does not make a spring, but I was struck by the subtext of this article at Bloomberg, “OPEC Failure Foretells Decline 10 Years After $10 Oil.” The mention of $10 oil is an odd bit of anchoring. And the general tone is surprisingly pessimistic. Key excerpts: A decade after OPEC failed to prevent […]
Read more...OPEC’s meeting over the weekend, which held off from making further cuts despite oil prices hovering in the low $50s per barrel, a level that is causing distress among the cartels’ members. What was eyecatching, however, was not the failure to act per se but the byplay. As we noted earlier, OPEC members tend to […]
Read more...I am puzzled by some recent market anomalies, which are breakdowns of established patterns: 1. Long dated Treasuries rising (a deflation signal) as stocks stage a dramatic rally 2. Dollar weakening while long dated Treasuries rise (the dollar and bonds usually go together) 3. Oil stocks rallying more than the S&P (28% versus 18%) when […]
Read more...As we have noted before, when oil prices are as low as they are now, OPEC members are in a classic prisoners’ dilemma. If they all adhere to production cuts, oil prices will be stronger as a result. But with governments badly dependent on oil revenues, the temptation to cheat is high. But if everyone […]
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