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 […]
Read more...Even with strong signs that global economic weakness will persist through 2009, investors in energy share hope for an oil price rebound sooner rather than later, and energy stocks staged an even bigger move than the overall market in the last two rallies But the fixation on oil tends to obscure the prospects for the […]
Read more...I am not making this up, and this is NOT Iran, which has stored oil on tankers due to a lack of sufficient refining capacity for its heavy, nasty crude. Even though the long-term outlook for oil is for higher prices, holding oil already produced off the market is no panacea. But the intent is […]
Read more...Um, a bit late to come to that realization, don’tcha think? From Barron’s (hat tip reader Michael): That ‘’super spike” in oil prices that Goldman insisted would lift crude to $200 a barrel ….? ….It never really turned out to be that prescient: instead of the 50% jump in oil that Goldman anticipated back in […]
Read more...Some observers of the fall in US consumer spending have noted that despite the overall contraction, some merchants, such as Wal-Mart, are reporting solid sales gains. They infer that buyers are still spending, but have downtraded radically so as to reduce their total expenditures. While one needs to take care in generalizing from the US […]
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