Commodity price, Energy crisis, Hedging, Market trends, Oil market

$500 per barrel: could oil price rise tenfold?

In 2012 a report produced by the UK Ministry of Defence  predicted that oil prices would rise significantly out to 2040, and by “significantly,” they meant to $500 per barrel. Today, after nearly two years of low oil prices and much talk about an oil glut this may seem farfetched. But we shouldn’t dismiss UKMOD’s warning. This could turn out to be the most important development facing humanity for decades to come. Continue reading

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Commodity price, Hedging, Market research, Market trends

Do markets move in trends?

Do markets move in trends – I find it baffling and fascinating that this question is still even debated, but there are individuals – usually in the academia – who, in all seriousness, will maintain that price fluctuations are random, and that we essentially hallucinate trends. I’ve tackled the issue in some detail in my book Mastering Uncertainty in Commodities Trading, but perhaps a few charts could help settle the issue: Continue reading

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Commodity price, Economics, Market research, Oil market

Market facts vs. market narratives

So the economy is in the doldrums globally and demand for oil languishes. At the same time, oil producing countries are pumping the stuff out as hard as they can with no let-up in sight. So how does it make sense that oil price surged nearly 60% from its January lows? Today’s news and rumors may explain today’s advance, but what about previous three months’ rally? The answer is that over time, it is the price that leads the narrative, not the other way around. I’ll try to elaborate.

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