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Roughly two weeks ago, AAA's national average price for a gallon of regular gasoline peaked just above $5. Taking one step further up the supply chain, Gasoline futures peaked even further ago on June 9th and have fallen 14.5% since then. While both the national average and gasoli...
Food price inflation in May reaches 10.1% in the US, 8.9% in the Eurozone. Eurozone sees higher inflation rates for wheat, fats and oils, commodities affected by the war in Ukraine. Central bank actions show early signs of tempering inflation in the US, but the global picture rema...
We are nowhere near demand destruction for oil and gas. Blackouts, brownouts, surging prices are crashing the green energy narrative. Interestingly, people like electricity and get really grumpy when its not there. We think a golden age of renewal for non-renewables is about to be...
The transition towards a decarbonized economy is underway. It will involve a massive reallocation of resources. Economies will be reshaped as carbon emissions are cut, inevitably impacting portfolios. A possible acceleration from the current path, plus repricing that could have furthe...
On 8 June 2022, the Freeport LNG export facility on Quintana Island in Brazoria Co., Texas, suffered a leak in the pipe racks, which support the transfer of LNG from the storage tank area to the terminal's dock facilities, resulting in an explosion and subsequent fire. NYMEX prompt mo...
Energy’s share of the ACWI Index weight has declined from a peak of 16% in 2008 to 5.2% at the end of May 2022. Energy has been the best performing sector in the MSCI ACWI year to date through June 22. Higher oil prices have been a boon to energy companies, leading to highe...
As of May 2022, refining capacity stands at 17.9 million barrels per day (bpd). With utilization at near-record highs, the refinery margins are also at a record high. The energy industry is also moving to a net-zero carbon strategy which means less investment will be put into refi...
We expect elevated inflation to continue into 2023 due to the lagged impact of food supply disruption and elevated energy costs. Should a recession occur, its scale is likely to be limited by the reduced number of negative feedback loops. Consumers enter this slowdown with a large...
The gap between energy stocks and consumer discretionary stocks is striking. We think the market is suggesting that extreme energy inflation will lead to a dramatic reduction in spending. If consumer spending turns out to be more resilient than the market expects, we think the con...
Just before the US Fed raised interest rates on June 15, 2022, Crude Oil was trading above $120ppb. I believe the US Federal Reserve will continue to raise rates aggressively in an attempt to tame inflationary trends. With the market environment and Crude Oil trend, it’s im...