While Goldman, the firm that called for a “super spike” of oil prices this year to $150-$200 a barrel, has now reduced its forecast considerably, it still calls for oil prices significantly above their current level ($92 for Brent as of this writing) before year end. From Bloomberg: Goldman Sachs Group Inc. slashed its forecast […]
Read more...Here you were just getting used to some relief on gas prices and anticipating more was in the offing, when Mother Nature goes and wreaks havoc with your hopes. From Bloomberg: Almost 20 percent of the nation’s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast today, limiting fuel deliveries and […]
Read more...One of the factors we had mentioned that appeared to be contributing to the oil price runup of the first half of this year was China stockpiling gasoline, particularly diesel, in preparation for the Olympics. That notion was not well received. This article from Reuters says that China is unlikely to return to its pre-Olympics […]
Read more...In a break from “all Fannie, Freddie, all the time,” a couple of readers (Dean and Michael) sent oil market sightings, both which cited proponents of $200 a barrel oil in the not-too-distant future, and are have not changed their price views much. The first, from Reuters, gives the latest forecast from Goldman’s Arjun Murti, […]
Read more...Now it’s semi-official. A respected financial figure, no less a central bank chief with his reputation still intact, has said in bureaucrat-speak that speculation may indeed have had something to do with recent oil price moves. That view was nearly heretical until the rapid fall in oil prices began in July. From the Financial Times: […]
Read more...Bill Gross of Pimco’s monthly newsletter, “There’s a Bull Market Somewhere?” is out and making the rounds. The title refers to a Jim Cramer dictum. The bond chief uses it to argue that asset prices are declining on all fronts, which he then contends that the US government must reverse (boldface his): because in a […]
Read more...Wow, what happened? The CFTC went from being a lapdog to developing teeth. A little late, now that oil prices are on a forced march downward, but the commission could have backed off as oil became less of a front-burner issue. (Of course, your cynical blogger wonders if there was a risk that this story […]
Read more...Whether by accident or design, we’ve just been through a wee experiment on how higher fuel prices affect growth. Admittedly, it is difficult teasing out the impact of the credit crunch versus the oil and commodities spike, but in the US, habits started to change at $4 a gallon of gas, a lower level than […]
Read more...Macro investor Marc Faber, a commodities bull until the spring of this year, says that commodities have further to fall. From Bloomberg: Oil will likely drop further in the next three to six months, according to investor Marc Faber, who reiterated his forecast that the second half of 2008 won’t be “favorable” for commodities. The […]
Read more...Reader Paul e-mailed about the special, early opening of the NYMEX to permit pre-Gustav trading. As he correctly noted: I have NEVER heard of a US market opening early due to macro events; the usual move is to CLOSE during exceptional circumstances. Neither have I. This looks pretty suspicious. Did some influential parties need to […]
Read more...Reader Michael forwarded the current issue of The Energy Report by Phil Flynn at Alaron. It contends that demand destruction is proceeding at a rapid pace. It also highlights an issue discussed in a recent research report by Deutsche Bank, that energy demand forecasts by recognized bodies such as the EIA have been high, and […]
Read more...We have noted before that oil supply and demand data is pretty poor. Let’s face it, this is a product that is traded internationally with no central mechanism for purchases and sales. And certain important actors, namely OPEC members, are less than fully cooperative. But investors and commentators, hungry for anything that passes for hard […]
Read more...Nick Butler, in “The falling oil price is a lull in the storm,” argues that the break in oil prices is likely to persist for a bit due to improvements on the supply side, but that falling into complacency would be a mistake. The bad thing about the volatility in oil prices is that it […]
Read more...We have been skeptical of the idea that a weak dollar would be the boon for US manufacturing that many thought it would. The reason? The best possible outcome would be to see a resurgence in manufacturing, since manufacturing has higher potential for productivity gains than does the service industry (although getting back some of […]
Read more...Since roughly February, a solid minority of commentarors, including this blogger, have questioned the thesis that the rapid increase in oil prices was solely the function of supply and demand. It was disconcerting to see what reactions this stance elicited. There was often an unwillingness to read what was written, and instead turn the post […]
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