February 22nd, 2011 by Belisarius
Libya in unrest/civil war is having a mayor impact on the oil markets. Crude oil (brent) has yesterday reached post crisis high of 108.7 USD/bbl. The outcome of the Libya crisis is absolutely uncertain and together with other regional instability will be a strong factor for rising oil prices.
High oil price does not bode well with economic growth, so this could be large negative factor for economic growth and inflation.
According to OPEC January data Libya produces approximately 1.6 million barrels of crude per day. This is 3.9% of total OPEC production and 1.8% of world total demand.
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February 21st, 2011 by Belisarius
Baltic dry index rose 10.4% last week; Capesize Index was down 2.2%; Panamax Index rose 23.7%; Supramax Index increased 11.9%; Handysize Index rose 3.2%.
Shipping rates are rising after the lunar new year as Chinese buyers returned to the markets
Stockpiles of iron ore unchanged at record high, iron ore price rising. Steel inventories are going vertical and moving towards record highs. Thermal coal stockpiles ticked upwards.
I would expect further gains in rates because of low level from which the after holiday recovery started. Overall stockpile data paints kind of worrying picture of Chinese economy.
Longer term – I expect that rates will be on average bellow break-even (2.200 on BDI) for next couple of years on oversupply of vessels.
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February 19th, 2011 by Belisarius
Number of crude oil drilling rigs fell for 7; Number of natural gas drilling rigs fell for 1.
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February 19th, 2011 by Belisarius
Baltic Dirty Tanker Index rose 10.5%; Baltic Clean Tanker Index was up 3.6%.
The demand is somewhat stronger, but my guess is that supply will emerge and rates will remain range bound.
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February 18th, 2011 by Belisarius
U.S. railroads originated 274,043 carloads, up 6.3% compared with the same week in 2010 and down 4.7% compared with 5-year average. Week over week change was 2.4%.
It doesn’t look particularly strong.
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February 18th, 2011 by Belisarius
Working gas in storage fell 233 Bcf from previous week. The consensus was at 235 Bcf.
Storage level is 114 Bcf lower than same time year ago.
Heating season is nearing its end, the market is well supplied, so no fundamental reasons for natural gas price recovery.
Reason for price falling in recent week were milder weather forecasts. Technically natural gas is oversold, s I would not exclude price rebound despite unfavorable storage numbers.
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February 17th, 2011 by Belisarius
Markets well supplied, demand weak, refiners cutting refining capacity and crude oil imports. Record high WTI – Brent pricing disparity.
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February 14th, 2011 by Belisarius
Baltic dry index rose 12.9% last week; Capesize Index was up 13.5%; Panamax Index rose 20.2%; Supramax Index increased 3.9%; Handysize Index rose 0.9%.
Shipping rates rose after the lunar new year as Chinese buyers returned to the markets
Stockpiles of iron ore, steel and coke are rising in-sync with their respected prices. Buyers probably stockpiling in fear of even higher prices.
I would expect further gains in rates; Still keeping close watch on Egypt developments.
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February 14th, 2011 by Belisarius
Number of crude oil drilling rigs fell for 13; Number of natural gas drilling rigs fell for 5.
On world scale number of oil & gas drilling rigs fell for 6 in January.
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February 14th, 2011 by Belisarius
Baltic Dirty Tanker Index rose 5.7%; Baltic Clean Tanker Index fell 3.5%.
Some supply/demand tightens into the end of February, but my guess is that supply will emerge and rates will remain range bound.
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February 14th, 2011 by Belisarius
China trade balance was reported at USD 6.5 billion vs. USD 13.1 billion in December and USD 11.3 billion consensus. Export and import growth were running at 37.7 and 51.6 percent vs. 17.9% and 25.6% in December.
Trade balance shrunk on increased imports before holidays and on rising pressure from commodity prices.
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February 12th, 2011 by Belisarius
U.S. railroads originated 267,682 carloads, down 0.1% compared with the same week in 2010 and down 6.3% compared with 5-year average. Week over week change was -8.1%.
Large weekly drop as a result of bad weather.
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February 11th, 2011 by Belisarius
Working gas in storage fell 209 Bcf from previous week. The consensus was at 197 Bcf.
Storage level is 71 Bcf lower than same time year ago.
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February 10th, 2011 by Belisarius
Crude oil stocks rising, markets well supplied, demand weak. The price of oil mostly unchanged.
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February 8th, 2011 by Belisarius
POBC raised key one-year lending rate for 0.25% to 6.06%. Timing of the announcement came as a surprise to the markets, as the rise was expected further into the first quarter.
To repeat: Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.
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