Rogue trader exposes fickle oil market 3 Jul 2009 How can a small trader drive up the price of a barrel of crude by $2.50 in under an hour? By putting a big bet on oil futures in the early morning. The market proved easy to move. At least traders PMV didn't lose much in unwinding the trade.
China pushes envelope for oil 3 Jul 2009 First Iraq, now Argentina. Chinese energy groups are hunting for oil in risky places. That s good for countries with resources to sell. But it s unwelcome competition for the oil majors. At least in Argentina, a deal for Repsol s assets could make sense for all sides.
Argentine anti-market policies’ good run may end 30 Jun 2009 President Fernández' moderate defeat in midterm elections may force policy compromise. So may reality with wheat planting down 30%, her government s strategy of heavily taxing farmers and exporters may finally hit the economic buffers. Still, Argentina has had a great run.
Oil surge is mixed blessing for Russian economy 18 Jun 2009 At $70 a barrel, oil prices are back where Russia says it can balance its accounts. But the Russian economy is still in a severe slump, worsened by longstanding flaws including corruption. The danger is that with oil on the rise, reforms might look less urgent.
Gold vending machines are sign of the times 17 Jun 2009 The idea of buying gold from machines at airports seems odd. After all, if the worst happened, why would anyone want to take it with them? But the buzz around the yellow metal makes sense. With both deflation and inflation causing concern, its perceived attributes seem alluring.
Iraqi oil could be China’s consolation prize 15 Jun 2009 Sinopec's mooted £5bn bid for oil producer Addax would give the Chinese petro giant access to Kurdistan and Nigeria, where Western majors tread with caution. It s China s payoff for political isolationism but no substitute for the bigger deals that got away.
Oil, bonds highlight risk of imperfect recovery 10 Jun 2009 Huge deficits and zero rates are keeping depression and deflation away. But the oil price has been swept up by the rising liquidity tide and bond yields have risen in a fearful response to free money. The two together could make for a more painful recovery than the market hopes.
China throws petrol on speculative fire 2 Jun 2009 A 7% raise in official petrol prices is a nod towards market forces. Beijing is clearly worried about cushioning the fragile consumer. The problem is that its petrol price controls can encourage speculation.
Waning supply helps underpin oil price rise 13 May 2009 Oil prices have rocketed about 70% in three months. With demand still declining, that owes much to a revival of investor spirits. But there's something else: supply capacity, especially from Opec, is shrinking. With demand recovery in mind, that's a reason to bid up the price.
BP and Shell can cope with $50 oil 28 Apr 2009 Neither company is comfortable with the current price. They think at least $60 a barrel is needed to keep up investments and maintain their dividends. But both can borrow more. BP looks like the safer shortterm bet. It is growing faster and spending less than Shell.
Chinese gold rush would benefit China least 27 Apr 2009 Changing US Treasuries into gold would help Beijing undermine the dollar s dominance. But years of mercantilism can t be unwound painlessly. Big Chinese buying would drive the yellow metal s price sky high. The biggest beneficiary of a gold rally? Step forward, Uncle Sam.
Iraqi oil recovery still a mirage 23 Apr 2009 The nation needs foreign help to meet its target of doubling production in five years. Security risks are no longer insurmountable, but the politics may be. A parliamentary committee has pledged to push Shell out before it has even arrived. Even service contracts look risky.
Some Russian companies are more equal than others 7 Apr 2009 Gazprom, for example. The debtladen Russian giant has agreed to buy out Eni's 20% stake in Gazprom Neft for $4.2bn. The Italian oil major bought in two years ago when former oil major Yukos was broken up, under state pressure. Where will Gazprom get the money? From the state.
Total real winner in Santander’s E2.8bn Cepsa sale 31 Mar 2009 The Spanish bank sold its 32% stake in the oil company to Abu Dhabi. The French oil company, which owns a 49% stake in Cepsa, gains a friendly partner and effective control of the company. Santander took too long to sell the stake. But it managed a decent price in a dire market.
Paper gold: nice idea, shame about the politics 24 Mar 2009 China s suggestion for a world reserve currency managed by the IMF is smart. It would address some of the financial imbalances that tipped the world into crisis. But China seems to be primarily motivated by friction with the US the nation with most to lose from such a plan.
Gold could be set for huge speculative bubble 19 Mar 2009 With the US and other countries monetizing budget deficits, the chance of rapid inflation has surged. The annual production of gold, the traditional hedge, is far below the world s rate of money supply growth. An inflationary panic could thus bring an explosive gold price rise.
Opec accepts hard reality 16 Mar 2009 The oil cartel says it didn t cut production quotes because it s worried about what high oil prices would do to the fragile economy. But it hasn t delivered on recent promised production cuts. Until Opec can keep its word, it makes sense not to overpromise.
Russian cash crisis offers China great oil deal 18 Feb 2009 China s $25bn oil purchase agreement with Russia trades cash for bargainpriced oil over 20 years. That solves a chunk of China s longterm oil supply problem. Russia may be unreliable, but the deal s advantages make it well worth the risk.
BP shouldn’t rush to name new chairman 11 Feb 2009 Paul Skinner was tipped for the top job at the UK oil producer, but the Rio Tinto chairman has tarnished his record with a big cash acquisition at the top of the market, and an ongoing fight over raising capital to pay for it. There s no rush to make a decision, so best to wait.
Oil at $45 is not cheap 10 Feb 2009 It s easy to lose perspective on the oil price given the $147 high it hit last year. But it traded below $35 for decades before the recent superspike. If producers think its current level is too cheap, that s because they have grown accustomed to high prices.