It’s too soon to talk of an actual energy crisis. But as the charts showing Brent oil and European natural gas prices confirm, it is certainly time to start planning for the possibility: Oil prices have recently risen 25%. And Europe risks gas shortages if there is a cold winter
Chemicals and the Economy
Oil markets, OPEC, enter the endgame for the Age of Oil
2 major events shocked oil markets last week. They marked the start of (a) the endgame for the Age of Oil and (b) the paradigm shift to the Circular Economy and the new Age of Energy Abundance. The new ‘Net Zero by 2050’ report from the International Energy Agency (IEA) was the first shock: It […]
Petrochemicals must face up to multiple challenges
Europe’s petrochemical sector must prepare now for the trade war, US start-ups, Brexit and the circular economy, as I discuss in this interview with Will Beacham of ICIS news at the European Petrochemical Association Conference. With higher tariff barriers going up between the US and China, the market in Europe is likely to experience an influx of […]
High oil prices take European operating rates to record lows
Life doesn’t get any easier for Europe’s olefin producers and the consumers who depend on them. As the chart shows, based on latest APPE data, operating rates averaged just 78% in H1. This is almost as bad as H1 2009, when they were 76%. And it is a long way away from the 90% levels […]
Markets in wait-and-see mode as holiday season arrives
Markets have moved into summer holiday mode in recent weeks whilst they wait for a new direction, as the chart shows. It is therefore timely to look back over developments since the start of the year: The S&P 500 (purple) has been the clear winner, up 15%. The key to its out-performance has been the central […]
Consensus views on growth, commodity regulation, start to change
In early March, the blog described itself as feeling like “a lonely voice, focused on what is really happening in the real world”. But gradually since then, the consensus view on growth and commodities regulation has begun to shift in its direction. For example, a recent New York Times article on China by Nobel Prize-winner Paul Krugman could have […]
Cotton prices slip as India reverses export ban
Cotton prices are falling again, since Monday’s reversal by the Indian government of its proposed ban on cotton exports. India is the world’s 2nd largest cotton exporter, after the USA, with 20% of the market: • On 5 March, its Textiles Ministry banned all exports • Domestic users had applied pressure to divert supplies to […]
Lower refining rates support EU petchem margins
Sometimes every cloud does have a silver lining. And that’s currently the case with the fall in demand for oil products. The European petchem industry is based on feedstock from refineries such as naphtha and LPG. And as the chart above from the IEA shows, German refinery runs, like others elsewhere in Europe, are down […]
Oil prices weaken as inventories continue to build
Oil markets are an accident waiting to happen for the chemical industry. Oil inventories around the world are close to record levels, with the IEA (International Energy Agency) reporting they are over 61 days of demand. Equally, as the Petromatrix chart above shows, they are at record levels in the USA (the world’s largest market), […]
TOTAL warn on oil supplies
TOTAL’s CEO, Christophe de Margerie, has become even more pessimistic on the future of oil supplies. In 2007, when prices were rising, he suggested it would be very difficult for production to reach even 100mbd, versus the 130 mbd or more assumed by the IEA and the US government. Now, he is warning that the […]
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