Last few weeks as Brent touched $80/bbl, consumers are starting to get genuinely concerned about inflationary pressures building in the US economy. Gasoline prices averaging closer to $3/gallon at the pump with implications for US consumer demand going into the key summer driving season this year. Pressure from US is mounting for OPEC to take their foot off the pedal and let the barrels flow freely. OPEC took 1.2-1.8mln bpd out of the market in...
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Oil Got Low Low Low Low….
WTI Oil prices breached $30/bbl on the downside in February’16 when OPEC declined to cut production despite a slide in prices seen earlier. Saudi Arabia’s Oil Minister Ali al-Naimi who uttered phrases such as, “whether it goes down to $20, $40, $50, $60, it is irrelevant,” certainly did not help the market back then either. Doomsday articles were published calling for Oil to break $20/bbl even. At that time OPEC (Saudi Arabia) did not...
Brave New World
What a change a few months makes post the Trump hype and reflation trade shenanigans. Q1’17 has completely unwound the “reflation” thesis across various stocks, sectors, and foreign currency markets, essentially the long dollar trade. However, Equities are still strong as an asset class with the US S&P500 and Eurostoxx 50 up 8% and 9% respectively year to date. So what gives? What may seem boring on the surface has been...
