Digest

  • The Trump doctrine

    The Trump doctrine Cover image Published 17 May 2019 by
    Oil fundamentals and geopolitics trumped the trade war this week as oil prices outperformed equities to finish the week higher despite the breakdown in the US-China trade talks at the end of last week and fears of a protracted trade war weighing on sentiment. Crude oil prices showed great resilie..

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  • A game of chicken

    A game of chicken Cover image Published 10 May 2019 by
    While most countries would be loath to get involved in two simultaneous conflicts, the Trump administration has had no qualms over opening multiple fronts at the same time. But with geopolitical tensions running high, it seems that the war that the market will have to come to terms with is not ex..

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  • Zombie apocalypse

    Zombie apocalypse Cover image Published 3 May 2019 by
    We all know that scene in a horror movie where the heroine predictably goes to hide from the zombies in the basement where the boyfriend keeps his vintage collection of chainsaws and hockey masks. Everyone in the theatre has to fight the urge to jump up and scream: “No, you idiot! Get out!” But,..

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  • One step forward, two steps back

    One step forward, two steps back Cover image Published 26 Apr 2019 by
    Oil prices caught a bid early in the week as the Trump administration’s surprise announcement it would not renew Iran sanctions waivers caught many in the market off-guard. But the rally in flat price stalled and remains underwhelming compared to the move in timespreads, which continue to s..

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  • I still know what you did last summer

    I still know what you did last summer Cover image Published 12 Apr 2019 by
    Due to the Easter holiday the next Digest will be published on 26 AprilThe sequel to the cult classic movie ‘I know what you did last summer’—one of the seminal horror films of the 1990s—begins by highlighting the main antagonist’s difficulty getting over the events of previous summer, haunted by..

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  • Waiting for the fireworks

    Waiting for the fireworks Cover image Published 5 Apr 2019 by
    While a lot of the press focus and commentary this week will be on Brent hitting $70 per barrel—a six-month high (yippee)—the more impressive move in our eyes has been the tightening of the WTI crude curve from a relatively steep contango in the front to flat in just three weeks. To be sure, the..

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  • Trouble with the curve

    Trouble with the curve Cover image Published 29 Mar 2019 by
    The collective gasp that you probably heard early in the week was triggered by the inversion of the shorter end (the very front part) of the Treasury yield curve. The 3-month treasury bill now yields more than the 10-year Treasury for the first time since 2007. For many, especially those in the b..

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  • You break it, you buy it

    You break it, you buy it Cover image Published 22 Mar 2019 by
    Back in January, in the first Macro Energy Digest of the year, we argued that the market in December had missed some important signals out of Saudi Arabia, perhaps distracted by the broader capitulation in risk assets and the dramatic about-face from the Kingdom on production over H2 18. We point..

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  • Kick the can

    Kick the can Cover image Published 15 Mar 2019 by
    It has been a tough slog for crude traders over the past few months, especially as much of the speculative community has sat on the sidelines watching as oil has rallied by 35% off its lows. At IP Week in London in late February, it was our sense that everyone was bullish but no one was long, and..

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  • Wag the tail risk

    Wag the tail risk Cover image Published 8 Mar 2019 by
    In the last few weeks, the main question being asked of us in the macro space is: if the physical crude market is really so tight, then why are prompt Brent spreads and the entire WTI curve still in contango? The lack of proper backwardation in either benchmark has been a mental hurdle for many a..

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  • Seeing is believing

    Seeing is believing Cover image Published 1 Mar 2019 by
    Crude’s 3.5% intraday price drop this week triggered by Donald Trump’s tweet jawboning OPEC underlines exactly why trading crude has been so challenging lately. With very thin liquidity, given that much of the oil world was at IP week in London, there was no one to take the other side of the sell..

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  • Crude complacency

    Crude complacency Cover image Published 22 Feb 2019 by
    Clients are increasingly asking us whether we are bullish or bearish on oil, to which our response generally has been ‘yes’. The physical crude market continues to exhibit a strength that many physical traders have described as ‘unprecedented’, given the sanctions on Iran and Venezuela, alongside..

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  • Everything bullish except flat price

    Everything bullish except flat price Cover image Published 15 Feb 2019 by
    The physical crude oil market continues to surge despite the indifference from the financial markets. This week, sour crude markets rallied impressively as refiners continue to scramble to secure barrels, in part due to the dislocations caused most recently by the US sanctions on Venezuela, but m..

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  • Crude consolidation

    Crude consolidation Cover image Published 8 Feb 2019 by
    The rally in both crude and equities to start the year has been met by a healthy dose of scepticism for the most part. Any boost from the dovish pivot by the Fed has been short-lived and failed to solidify the rebound in equities. Moreover, risk assets are moving counterintuitively as a consequen..

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  • Everything is awesome

    Everything is awesome Cover image Published 1 Feb 2019 by
    Fed Chairman Jay Powell surprised the market (and us) this week when he emphasised that the next policy rate move could be either up or down, and simultaneously expressed an accommodative stance on ending balance sheet reduction sooner than had been previously communicated. This came just a littl..

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