Tag: oil

How Brexit makes Britain poorer, forcing Carney to stay his hand

How Brexit makes Britain poorer, forcing Carney to stay his hand

The risk in the UK is an inflationary recession. For now, Mark Carney is resisting a rate hike. But how long will the Bank of England hold out? And how long can British consumers keep spending if real wages are falling? Two things would ease this pressure. One is some sort of fiscal support for real wages. The second is the fall in oil prices. As in the US, I see oil prices as key.

Is the new rout in oil getting worrying?

Is the new rout in oil getting worrying?

Earlier this morning, the New York Mercantile Exchange was quoting delivery for light sweet crude in July at $43.30. That’s a far cry from the $55 average that analysts had expected for 2017 as recently as last month. And all indications are that this price deflation is not transitory, but […]

What the tension in the oil market means

What the tension in the oil market means

As we await the US jobs data, it bears remembering that oil is a big wildcard both on in terms of consumption and investment. Right now, oil is plunging, down as much as $14 a barrel for the Brent variant and $17 a barrel for WTI since mid-April. The question is whether the rout continues.

The shale oil bubble

The shale oil bubble

Was the shale oil capital expenditure explosion simply a bubble? What trendline does this chart follow going forward and what does it mean for price? These are some fundamental questions that need to be answered.

Why Canada is the country to watch on Trump’s trade policy

Why Canada is the country to watch on Trump’s trade policy

If you want to know whwere Trump is headed on trade, don’t look at China or Mexico. Don’t even look at the UK. Canada is the country to watch for a number of reasons. First of all, Canada has an existing deal with the US and Mexico under NAFTA. That matters in terms of understanding where Trump is headed on trade. Moreover, Canada is also the 2nd largest trading partner for the US behind the European Union. Finally, the fact that Canada is finishing off its EU trade deal just as the UK is getting ready to exit puts it in a unique position in reconfiguring world trade alliances – wth an Anglo-American group involving Canada a potential outcome.

Where would the US be today without the shale stimulus?

Where would the US be today without the shale stimulus?

When one thinks about why the US has outperformed, a lot of the analysis is destined to focus on fiscal and monetary policy. And while I think that’s an important thought process to go through, I believe that bank recapitalization and shale oil were the differential stimuli that helped the US recover better than Europe. Let me explain below.

RBS: The bears have killed Goldilocks

RBS: The bears have killed Goldilocks

Last week I was talking about the Goldilocks scenario for the US. I think it is achievable. But this week, RBS tells us that the bears have killed Goldilocks. They say we should “sell everything”. Of course, I am more bullish than RBS – or I wouldn’t be talking about […]