Macro Energy

Volatility in the energy markets directly impacts equity, fixed-income, currency, and commodity markets. The Macro Energy service from Energy Aspects offers a specific focus on how energy prices are being driven by supply and demand fundamentals and geopolitics, and how that in turn will feed into risks and opportunities across a whole host of markets.

  • The dash for trash

    The dash for trash Cover image Published 18 May 2018 by

    Back at the start of the year we noted a few important developments that the broader oil market was slow to realise. First, we noted that Brent, which had been trading in a $40-60 range for the past three years, was now shifting into a higher range, closer to $60–80 per barrel. Of course, all tha..

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  • Bear trap

    Bear trap Cover image Published 11 May 2018 by

    Over 2015, the oil market kept trying to pick the bottom of the rout as traders convinced themselves that the worst was over. Instead, prices continued to convulse lower all the way down to $27 by January 2016, significantly below most people’s expectations. In many ways, we are now seeing the fl..

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  • Geopolitical risks vs realities

    Geopolitical risks vs realities Cover image Published 4 May 2018 by

    Given the volume of news flow over the last several weeks regarding Iran, Libya and broader oil fundamentals, it’s perhaps a little worrying for oil bulls that WTI has traded in a roughly $2 per barrel range since 19 April. After selling off in February, oil prices had been steadily moving higher..

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  • A serving of Macron and cheese

    A serving of Macron and cheese Cover image Published 27 Apr 2018 by

    It was no secret that French President Emmanuel Macron’s state visit to Washington DC this week was, in effect, a last-ditch effort to salvage the Iran nuclear deal—the Joint Comprehensive Plan of Action (JCPOA)—which President Trump has signalled his clear intent to pull out of. The real questio..

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  • Playing Catch-up

    Playing Catch-up Cover image Published 20 Apr 2018 by

    While it’s very easy to lay the blame for the recent oil rally strictly on geopolitical risk premia, and there certainly have been many candidates in the last month, the reality is that the market is finally beginning to wake up to the fact that we have almost completely eroded the inventory, i.e..

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  • War and peace

    War and peace Cover image Published 13 Apr 2018 by

    The price action over the last two weeks was driven primarily by war and peace. Last week, fears of a trade war between China and the US weighed heavily on broader risk assets. But by Monday, risk had rebounded from last week’s swoon after Chinese President Xi Jinping struck a conciliatory tone,..

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  • Betting on the river card

    Betting on the river card Cover image Published 6 Apr 2018 by

    Had we said back in November 2017 that US petroleum inventories would not only fail to build in Q1 18 but instead draw by some 40 mb, that Donald Trump would appoint John Bolton as National Security Advisor and Mike Pompeo as Secretary of State, putting Iran firmly in US crosshairs, and that oil..

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  • Eroding global shock absorbers

    Eroding global shock absorbers Cover image Published 29 Mar 2018 by

    This Friday is the end-of-month and the end-of-quarter, but for much of the world it is also Easter Friday. As such, we are publishing an early and condensed Digest this week. With both Nymex and ICE closed on Friday, Thursday will be the last day to finish squaring books and index rebalancing ha..

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  • The drums of war

    The drums of war Cover image Published 23 Mar 2018 by

    The oil markets bucked the broader trend in risk markets this week by extending a rally that began last Friday despite some major macro headwinds. Broader risk assets have sold off as the market digests a host of developments: a Fed which is hiking rates, the prospect of the Trump administra..

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  • You're fired!

    You're fired! Cover image Published 16 Mar 2018 by

    In the span of one week, two members of the ‘axis of adults’, the name given to the so-called grown-ups in the administration who were supposedly protecting the president from his own worst instincts, were ushered out of the cabinet. Last week’s departure of Gary Cohn was followed this week by th..

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  • No dumping zone

    No dumping zone Cover image Published 9 Mar 2018 by

    President Trump’s order to impose a 25% duty on steel and a 10% duty on aluminium imports has dominated the news cycle this week, triggering the departure of Trump’s economic advisor Gary Cohn. The order ended up being more flexible than originally pitched, with Canada and Mexico excl..

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  • The Man of Steel

    The Man of Steel Cover image Published 2 Mar 2018 by

    Over the last month, we have noted that sentiment was shifting from green lights to flashing yellows. This has been driven by a broad repricing of assets due to rising volatility, triggered by expectations for higher inflation and ultimately rising rates (for details, please see our Macro E-mail..

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  • Houses of the Holy

    Houses of the Holy Cover image Published 23 Feb 2018 by

    Much of the oil world’s attention has been on events in London, as traders and professionals descended on the British capital for the myriad corporate gatherings loosely surrounding the Energy Institute’s annual International Petroleum Week conference. In terms of price action, this has been one..

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  • Risk reversal or relief rally?

    Risk reversal or relief rally? Cover image Published 16 Feb 2018 by

    Risk assets witnessed a stunning reversal over the course of the week: yields, equities and oil are higher; the dollar is weaker; and the VIX is lower. Compared to the last few weeks, the tone this week shifted back to ‘risk on’, and it’s hard not to notice the much stronger sentiment, especially..

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  • Fear and loathing

    Fear and loathing Cover image Published 9 Feb 2018 by

    Crude markets sold off aggressively over the course of the week following the broad equity sell-off triggered by last week’s jump in volatility. The S&P is now down by 10% from its highs, which is the technical definition of a ‘correction’. This was ultimately the trigger for the sell-off in..

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