Commodity price, Energy crisis, Market trends, Oil market

More bad news from Saudi Arabia

 

Over the years I’d highlighted the increasingly dubious status of Saudi Arabia as the world’s oil production powerhouse. This year we learned that their flagship oil field Ghawar produced much less than everyone knew, now courtesy of Bloomberg we find another disconcerting bit of information corroborating these doubts as the following chart illustrates:

SaudiCrudeStockPile

There can be little doubt that we are facing a grave and serious energy predicament going forward. Our economies and societies better begin preparing yesterday. Links to my research outlining the fundamental supply and demand conditions can be found here: Continue reading

Standard
Commodity risk, Economics, Energy crisis, Market research, Oil market

The oil price shock: has it arrived?

Experts seldom expect surprises. In spite of the ever deepening economic and political uncertainties gripping most oil producing and oil consuming regions, most market experts surveyed last year predicted that oil price would fluctuate between $65 and $70 through 2023.

That forecast assumes that nothing unforeseen would happen over the next five years. Such an assumption, to put it politely,  is unjustified and the list of reasons is long and complex, and it can be neither ignored nor wished away. Over the recent months I’d written a handful of articles on the subject of the ‘coming oil price shock.’ Here are the last three: Continue reading

Standard
Asset management, Commodity price, Market trends, Risk management, Trading, Trend following

How we knew yields would collapse?

While most market experts completely failed to predict this year’s collapse in interest rates (see the chart below), we traded the event profitably. In this article I summarize the the hows and the whys of our performance.

Experts_YieldsForecasts

How did we know to short US T-Notes starting in Q4 2017, then reverse and go long in November of 2018? Did we know interest rates would first rise, then collapse at the fastest rate in 50 years? Are we so brilliant as forecasters? Did we have insider information? The answer is, none of the above.

We did not know what would happen – but profited from the events anyway. Here’s how: Continue reading

Standard