The International Energy Agency (IEA) has cut its estimate of expected global GDP growth in 2009 to just 1.2%. It therefore expects the world to record its first back-to-back annual decline in oil demand since 1982/3. It says oil production last month was unchanged at 86.2mbd, despite OPEC cutbacks and the first fall in Russian […]
Chemicals and the Economy
Middle East liquidity dries up
In the soccer world, the UAE has been making headlines this week. It is proposing to fund the first-ever £100m ($150m) transfer – of the Brazilian player, Kaka, to Manchester City. But behind the scenes, the collapse of the oil price has been playing havoc with the economies of the Gulf countries (GCC). HSBC, for […]
Moody’s worries about the chemical industry
Moody’s, the global ratings agency, is today forecasting a 70% chance of a U-shaped recession, and a 15% chance of either a V or L-shaped downturn. This broadly agrees with the blog’s own view, set out a month ago. Moody’s also singles out the chemical industry as being one of those most at risk from […]
Eurozone under pressure
Early last year, the blog flagged up a warning from Gillian Tett in the Financial Times that Iceland could go bankrupt, as its banks were “too big to rescue”. Yet at the time, the United Nations had listed it as having “the highest standard of living of any country” in the world. Unfortunately, however, Iceland’s […]
Dow’s debt ratings cut – could hit junk status
Over the last few weeks, INEOS had to scramble to get a covenant waiver from its lenders, and Lyondell went into Chapter 11. Now Dow’s debt is facing a potential cut to junk status from the main ratings agencies. Dow’s rating has already been cut, following the collapse of the K-Dow deal with Kuwait. And […]
Crude oil trading hits new record
The ever-interesting PetroMatrix report notes that 2008 saw record volumes of crude oil trading. As their chart shows (above), the volume of trading on futures markets in 1995 was equal to daily oil production volumes. By 2000, the ratio had reached 2 : 1, and by 2005 it was 3 : 1. The ratio then […]
European auto sales to fall 16% in 2009
European auto sales fell 8.4% in 2008, versus 2007. Sales of 13.56m autos were just ahead of the USA’s 13.2m. European volumes continue on a worsening trend, with December down 19% versus last year: • Spanish sales were down 50% • Sweden was down 45% • The UK was down 21% • The Netherlands were […]
IMF warns on recession’s “social consequences”
Dominique Strauss-Kahn, MD of the International Monetary Fund (IMF), has a surprisingly hard-hitting interview today in Bloomberg. Casting aside normal central bank reticence he warns: • Their current $1.4 trillion forecast of global financial losses will soon be increased by a “significant” amount. • They will have to further reduce their November GDP forecast, which […]
Obama’s new Plan reveals “uncertainty”
The new ACC weekly report rightly notes that “any economic recovery will likely begin with a turnaround in the residential housing situation”. This is also the critical issue for the chemical industry, still reeling from last week’s Lyondell bankruptcy filing. Yet as the ACC’s chart shows above, no improvement is yet in sight. New home […]
US job losses worst since 1945
The US suffered 2.589 million job losses in 2008, making it the worst year since 1945. December’s 524k losses caused the jobless rate to rise to 7.2%, the highest since 1993. Equally, the average work week fell to a record low of 33.3 hours. Stock markets are still forecasting a V-shaped recession, but as the […]
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