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.

  • 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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  • Macro matters

    Macro matters Cover image Published 2 Feb 2018 by

    The market, having been conditioned to the incessant drum beat of ‘lower for longer’ over the past couple of years, has been worrying about the durability of this rally, which by most accounts appears to be a bit long in the tooth. After all, length is at an all-time high, physical markets are so..

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  • Can oil prices go parabolic?

    Can oil prices go parabolic? Cover image Published 26 Jan 2018 by

    Judging by much of the Street’s reaction to oil’s rally to start the year, it would appear there are still a lot of non-believers—many continue to ask ‘what will kill this rally?’. As if to prove our point, a number of forecasters, having been too bearish, are grudgingly making large upward revis..

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  • Pregnant pause

    Pregnant pause Cover image Published 19 Jan 2018 by

    Nothing ever moves in a straight line. Last week, we noted that while there was strong momentum to the energy market as 2018 began, there were some headwinds looming. And sure enough, both WTI and Brent prices are likely to finish down on the week, albeit marginally, for the first time in over a..

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  • Paradigm shift

    Paradigm shift Cover image Published 12 Jan 2018 by

    Both Brent and WTI have rallied hard this week, leading the energy complex higher to start the new year. In fact, both Brent and WTI have outperformed the broader commodity space and the S&P so far in 2018. To say that the sentiment about oil has shifted is an understatement.But with oil now..

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  • Baby it's cold outside

    Baby it's cold outside Cover image Published 5 Jan 2018 by

    Despite a major blizzard and frigid temperatures barrelling down the Eastern seaboard, driving daily gas demand to new heights, natural gas futures prices have failed to follow up on the rally that began in the middle of December, when the weather forecasts first started to turn bullish. While th..

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  • Alabama slammer

    Alabama slammer Cover image Published 15 Dec 2017 by

    Please note that this will be the last Digest of 2017. Normal service will resume on Friday 5 January 2018. Happy holidays everyone!Beyond the longer-term implications for the US political landscape of Doug Jones’ stunning victory in the Alabama Senate seat race this week (and there are many), th..

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  • Watching margins

    Watching margins Cover image Published 8 Dec 2017 by

    With OPEC committing to hold steady on production through 2018, market attention has now returned to near-term fundamentals as refinery margins have wobbled, US principal products stocks have swelled, and questions are now being asked about the sustainability of demand with oil at $60 per barrel...

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  • Finding a new range

    Finding a new range Cover image Published 1 Dec 2017 by

    The oil market’s knee-jerk reaction to Russia’s announcement that the OPEC/Non-OPEC cooperation deal would be reviewed in June was more instructive of the market’s insecurities and a lingering neurosis that oil producers would once again pull the rug out from underneath them (and discover there i..

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  • Risk reward

    Risk reward Cover image Published 24 Nov 2017 by

    Crude oil prices have jumped by 6% in the past week alone, continuing the move that has taken it more than 40% higher since the summer. More significantly, WTI has now shifted aggressively in the last two weeks into a steeper backwardation, much sooner than perhaps the market anticipated (for mor..

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