EXHIBIT 1: LITTLE CUSHION GLOBAL OIL SUPPLY & DEMAND
|
|
- Elmer Cooper
- 5 years ago
- Views:
Transcription
1 OIL: KEEP AN EYE ON SUPPLY March 3, 212 Northern Trust Global Investments 5 South La Salle Street Chicago, Illinois 663 northerntrust.com James D. McDonald Chief Investment Strategist jxm8@ntrs.com Daniel J. Phillips, CFA Investment Strategist dp61@ntrs.com Phillip B. Grant Investment Analyst pbg1@ntrs.com SUMMARY A cursory examination of economic history might lead one to believe spiking oil prices always cause recessions. The popular press might lead you to conclude that current tensions with Iran have led to a speculative spike in oil prices, raising this risk of recession. However, it is our view that the primary cause of the current high price of oil is global supply and demand and that high oil prices by themselves do not mean an economy will head into recession. Demand-driven price increases are less problematic than supply-driven ones, as overall economic strength can carry the day. At the margin, the supply uncertainties tied to governmental changes in Tunisia, Egypt and Libya have likely added to pricing pressures. Additionally, the global sanctions and pending EU embargo on Iranian oil, along with the chance of armed conflict has raised the risk premium. It is also critical to understand the reaction of central bankers to the price spikes and the inflationary trends in other commodities. Today, we have global central banks committed to accommodative monetary policy and commodity prices outside of energy showing lower inflation. Today s price levels for global oil do not represent a clear and present danger to the global economy, however the risk lies in the potential of a future price spike caused by a Middle Eastern supply shock EXHIBIT 1: LITTLE CUSHION GLOBAL OIL SUPPLY & DEMAND LHS: Full capacity potential - barrels/day (millions) LHS: Consumption - barrels/day (millions) RHS: Real oil price ($) Source: Energy Information Administration, Northern Trust Global Investments; data through 211, est. through 213. Exhibit 1 illustrates the growing global demand for oil and the limited spare capacity available. Oil consumption increased by 27% from 1994 to 211, including a 76% increase in non-oecd consumption. According to the Energy Information Administration (EIA) this upward trend is expected to continue, with global consumption projected to grow another 3% percent over the next two years. Further, excess capacity the difference in potential production from actual production has shrunk from 4.5 million barrels per day in 2 to just over 2.5 million barrels. However, it is expected to rebound to 3.6 million barrels by the end of 213. Before being too comforted by this, we need to incorporate the significant increase in usage over this time. In 2, the spare capacity represented 4% of demand while in 21 it was 3%, and has been much smaller at times over the
2 last decade. In addition, the required capital expenditures to bring on increased capacity continue to rise (global exploration and production expenditures have risen over five-fold over the last 25 years), representing a further underpinning to oil prices. We think this continuing growth in demand, alongside ever more expensive supply, means high oil prices are here to stay (outside of recessiondriven declines). To assess the vulnerability of the global oil supply to a short-term supply disruption, we examined the world s 2 largest oil producers in Exhibit 2. We categorized the countries into those we believe to have stable production outlooks and those countries where production could be at risk. In all, the top 2 producers are responsible for nearly 85% of the world s oil. Of that, we consider over 35% to be potentially at risk with around 16 million barrels per day (b/d) of the world s oil potentially impacted by a disruption of the Strait of Hormuz shipping lane. If the Strait were to be closed by military action or other developments, we believe that roughly 13.4 million b/d could be exported by on-shore pipelines after a two to four week period. But the pipelines could still be vulnerable to terrorism, and the oil unable to be exported would approximate 2.6 million b/d. This would be the effective equivalent of the UAE, Venezuela, Kuwait, Iraq or Nigeria ceasing production and cause a shock to prices. World oil reserves would likely be released, and could provide some salve for the short-term disruption. We view current discussions around the release of these reserves as being politically motivated and unlikely to meaningfully reduce prices. Production Stable *Delivered through the Strait of Hormuz Source: BP, NTGI; 21 data. EXHIBIT 2: TOO MUCH SUPPLY AT RISK TOP 2 GLOBAL OIL PRODUCERS Potentially At Risk Country Production % of Global Country Production % of Global (mil b/d) Production (mil b/d) Production Russian Federation % Saudi Arabia* % U.S % Iran % China % United Arab Emirates* % Canada % Venezuela % Mexico % Kuwait* % Brazil % Iraq* % Norway % Nigeria % Angola % Libya % Kazakhstan % Qatar* % Algeria % United Kingdom % Total % Total % The countries that we categorize as having production that is potentially at risk have widely different circumstances, as follows: Saudi Arabia: While generally viewed as a steady producer, there are concerns regarding succession in the royal family; the expectation that a significant amount of Strait-bound oil could be exported via existing onshore pipelines mitigates some disruption risk. 2
3 Iran: Beyond the clear risk of outright war, concerns regarding potential Iran-directed sabotage of Iraq, Kuwait and Saudi oil production facilities carried out by Shiite allies are also prevalent. Iraq: Possible civil war if main factions cannot come to power-sharing agreement. Venezuela: Resource rich but economically poor and has seen production decline over the past decade. Additional concerns surrounding the health of President Chavez and the risk of revolution in the event of his passing. Nigeria: Another example of a resource rich but economically poor country where the risk of civil unrest is an ongoing concern; heightened tensions between Christians and Muslims contribute to the possibility for unrest. Libya: Production climbing since the end of the revolution, but risk remains over infighting regarding oil revenue distribution in the absence of a credible central government. The biggest oil shocks of the last 5 years were supply-related problems emanating from the Middle East, including the 1973 OPEC Oil Embargo and the 1979 Iranian Revolution. Demand-side related price shocks, such as the emerging market boom in the late 2s, are much more infrequent. Looking at Exhibit 3, one could conclude that all the recessions since 197 were preceded by a spike in oil, but whether the oil price spike was the cause or a coincident factor is worth additional research. U.S. recessions Real price of oil* EXHIBIT 3: HIGH OIL PRICES PRECEDE RECESSIONS OIL PRICE, RECESSIONS & OTHER NOTABLE EVENTS Iran/Iraq War Emerging Market Demand Iranian Revolution OPEC loses price controls Asian Financial Crisis OPEC Oil Embargo Persian Gulf War I Source: Bloomberg, National Bureau of Economic Research, NTGI; *real price of oil indexed to current price Persian Gulf War II Fed Begins QE Policies Taking a closer look, we examined economic growth in the U.S. and Europe following an oil price shock. We defined an oil price shock to be an increase of at least 4% in the price of oil over a six month period. This is in-line with the recent experience, where oil prices in the U.S. have increased approximately 38% since the end of September 211. We then looked at the level of real economic growth in the year immediately following the oil price shock. The results can be found in Exhibit 4 below. While the 197s oil price shocks ostensibly led directly to a decline in (much more energy intensive) real economic activity, the more recent oil shocks are not as conclusive. Of the past six oil shocks, four resulted in business as usual with economic gains over the next year in-line with or above the post-war median level of 3.1%. Two oil shocks coincided with a contraction of economic 3
4 activity in the following year. However, it is not clear whether oil prices were to blame as the 199 experience coincided with the savings and loan crisis and the 27 experience involved the global financial crisis. What appears to be a common denominator in recessions preceded by oil price shocks is a hawkish central bank. In these circumstances, high oil prices are coincident with strong economic growth and inflation risk leading to tighter monetary policy and heightened recession risk. In a June 1997 paper titled Systematic Monetary Policy and The Effects of Oil Price Shocks, current Federal Reserve Chairman Bernanke concluded that an important part of the effect of oil price shocks on the economy results not from the change in oil prices per se, but from the resulting tightening of monetary policy. Oil shocks defined as a 4% (or more) price increase over a six month time period EXHIBIT 4: OIL S RECENT IMPACT ON GROWTH MUTED ONE YEAR REAL ECONOMIC GROWTH AFTER OIL PRICE SHOCKS U.S. Euro Area Dec-73 Jun-79 Sep-86 Mar-89 Sep-9 Jun-99 Sep-4 Dec-7 Jun-9 Source: Bloomberg, Haver Analytics, NTGI. Note: Euro Area proxied by Germany prior to With the developed economies still in the midst of deleveraging from the global financial crisis, we think it is unlikely that developed country central banks like the Federal Reserve and the European Central Bank will raise interest rates due to current levels of oil prices. In addition, the inflation in commodities outside of oil is muted. While WTI oil has risen by over 3% since September 3, 211, Brent crude is up 21% and key U.S. commodities have been better behaved. U.S. natural gas has fallen 39% and coal is down 19%, while corn is up 4%, soybeans have risen 16% and copper has jumped 2%. This more tempered overall commodity price picture increases the chances that central banks will view the current oil spike as non-inflationary and therefore prove less likely to react. One reason for the muted impact on growth is the diminishing energy intensity of developed nations. Since 1976 the real price of oil has risen over 14% percent, but oil-related spending as a percentage of U.S. consumers total expenditure has actually decreased from 4.7% to 3.8%. This is largely explained by the substantial improvement in energy efficiency. Between 1976 and 28 the fuel economy of U.S. passenger cars has increased from approximately 14 miles per gallon to 23 miles per gallon. Reflecting these trends across developed countries broadly, OECD oil consumption actually fell from 2 to 21 from 48 million b/d (63% of global consumption) to 46.4 million b/d (53% of global demand). 4
5 The story across the developing (non-oecd) countries is starkly different due to their rapid industrialization. For perspective, U.S. per capita oil consumption peaked at 3 barrels per year (b/y) in the mid-197s, while Japan peaked at 18 b/y in the early 7s, and South Korea hit 19 b/y in the late 9s. Chinese per capita oil consumption is currently only 3 b/y, while Indian consumption is around 1 b/y. Strong non-oecd growth over the last decade has led to an increase in oil consumption from 28.5 million b/d (37% of demand) to 4.9 million b/d (47% of demand). This growth is expected to continue at a 2.5% annual pace over the next decade, compared to % demand growth in developed markets. When you blend both the developed and emerging economies together, you see that global energy intensity (the amount of energy used per dollar of GDP), has decreased by nearly 45% over the past 3 years helping mitigate the impact of higher oil prices. But what about the impact of higher oil (and gasoline) prices on the consumer? Looking at U.S. economic data, petroleum represents about 37% of U.S. energy usage, while natural gas is 25%, coal is 21%, and nuclear and renewable total 17%. While gasoline prices have spiked of late, we have seen natural gas and coal prices drop sharply helping cushion the impact of high oil prices. This has resulted in energy costs as a percentage of personal consumption falling from 6% in the early 8s to 3.8% at the end of 211. From 23 to mid-28, oil prices spiked from $36/barrel (real Brent prices) to $147/barrel, but total energy spending rose from 2.5% of personal consumption to just 3.2%. This supports the notion that the 28 recession was not caused by the coincident rise in oil prices, but was a result of the global financial crisis. EXHIBIT 5: A SMALLER SHARE OF WALLET OIL RELATED SPENDING AS A % OF PERSONAL CONSUMPTION VS. OIL PRICE RHS: Real price of oil* LHS: Energy as % of PCE Source: Bloomberg, NTGI; personal consumption data though 1/31/212. * real price of oil indexed to current price The historical experiences noted above help explain macroeconomic models, which predict a fairly measured impact on global growth from higher oil prices. The U.S. Federal Reserve models estimate a.2 % change in growth in both years one and two after a $1/barrel change in oil prices, a relatively benign impact. West Texas Intermediate oil was at $15/barrel at the end of March 211, comparable to today s prices. Brent prices a year ago were $117/barrel, and have increased modestly to $123/barrel today. 5
6 To further understand the impact of oil prices on consumer behavior, we also looked at the relationship between year-over-year changes in gasoline prices and its impact on both consumer sentiment and behavior (measured by retail sales less auto and gas). We found gasoline prices had a slight (but not statistically significant) impact on confidence with the biggest impact on confidence coming at a six month lag. However, despite this slight negative drag on confidence, spending showed no significant relationship. In fact, the correlation between year-over-year gasoline prices and year-over-year retail sales (excluding gas and automobiles) was actually positive. Moreover, analyzing any potential lagged effects only lessened the relationship suggesting that any relationship between the two is spurious and that both gasoline prices and retail sales are driven by other factors such as overall economic growth. We did similar studies on absolute levels (as opposed to year-over-year calculations) over shorter time frames and the result was the same. The resilience of retail sales to rising gas prices is likely a result of the overall environment in which gasoline prices rise. If the price increases are demand driven, stronger economic growth is likely, the employment picture should be improving, and consumer incomes should be rising. This helps offset the increasing prices at the pump. EXHIBIT 6: THE WORRIED CONSUMER GOES SHOPPING Source: Bloomberg, NTGI; data through 2/29/212. *brought forward six months, **less auto and gas sales We have also examined the impact of rising oil prices on the stock market. Exhibit 7 compares the year-over-year change in oil prices against the corresponding year-over-year change in global equity prices. The scatter plot depicts a minor positive correlation between oil prices and developed equity returns; while emerging markets exhibited a stronger positive relationship. Importantly, the data sets displayed a rather large variation. For instance, when looking at environments where oil had increased by over 4%, returns in the U.S. stock market ranged from as high as 5% to as low as -25%; this suggests that large increases in the price of oil have little impact on coincident returns. Oil prices versus subsequent six-month returns shows some negative relationship but again, the wide range of returns for a given change in the price of oil suggests other factors are at play in determining stock price movements. 6
7 EXHIBIT 7: STOCKS AREN T (USUALLY) BOTHERED BY OIL Source: Bloomberg; research is based on quarterly data from 1976 to 211. But all is not benign when looking at rising energy prices and the stock market. Separate research from Ned Davis Research indicates that investors do worry more than consumers, and stocks begin to struggle after sustained increases in energy prices. When the six-month rate of change of gas prices exceeds 2% (it is currently just above %), the stock market has gained just 2% per annum. Conversely, when the six-month rate of change is below 5%, the market has gained 11%. Similarly, when the 1-year rate of change in oil prices is above 33%, the stock market has fallen 7.5% per annum. When oil prices have been flat or falling, the market has gained 16% per annum. We don t believe these studies provide a definitive roadmap, as the prior episodes of rising oil and gas prices may have proven problematic because the central bank started tightening monetary policy. But they are a reminder that investors may discount the risk more quickly than shoppers. In looking at sector performance, we do see some distinction in the way oil prices impact different industries. As one would expect, the most notable impact of oil prices is on the energy sector where a 1% increase in the price of oil has historically resulted in a 2.4% increase in the price of energy stocks. All other sectors show very little response to changes in the price of oil. Furthermore, the way in which the more cyclical sectors show up as winners and defensive sectors show up as losers suggest that the change in oil price may merely coincide with the influence the economic cycle has on stock prices. Finally, while the results shown below came from a separate study than shown in Exhibit 7, the conclusion that oil prices have a slightly positive (but mostly insignificant) coincident impact on the broader market is confirmed. 7
8 2.42 EXHIBIT 8: OIL ONLY DRIVES ENERGY SECTOR OIL PRICE IMPACT ON S&P 5 SECTORS For every 1% change in the price of oil, each sector is impacted by the following amount (in %) Energy Materials Info. Tech. Utilities S&P 5 Industrials Telecom Financials Health Care Cons. Disc. Cons. Staples Source: Bloomberg; research is based on a regression analysis of monthly data going back to CONCLUSION We think the current high level of oil prices, while reflecting some risk premium for Iranian uncertainties, is mostly due to the tight state of global supply and demand. We don t think the current price levels are high enough to derail the (slow) global expansion, but a major spike tied to deterioration in the Middle East likely would. We think easy global central bank policy means that the history books will show this period to be one where oil prices rose but the economy did not go into recession, as financial conditions stayed easy and other commodity prices helped cushion the blow. The effect of high oil prices on the financial markets is less clear, as there is evidence to support both a benign and more worrying view. In general, investors will start to discount a worse economic environment if we sustain significant future price increases, but the current level of global oil prices should not be a deal-killer for growth or risk taking. Special thanks go to Jackson Hockley and Kevin Cleary for their insights into the energy industry and to Natalie Sproull for data research. IRS CIRCULAR 23 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see IMPORTANT INFORMATION: This material is for information purposes only. The views expressed are those of the author(s) as of the date noted and not necessarily of the Corporation and are subject to change based on market or other conditions without notice. The information should not be construed as investment advice or a recommendation to buy or sell any security or investment product. It does not take into account an investor s particular objectives, risk tolerance, tax status, investment horizon, or other potential limitations. All material has been obtained from sources believed to be reliable, but the accuracy cannot be guaranteed. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Periods greater than one year are annualized except where indicated. Returns of the indexes also do not typically reflect the deduction of investment management fees, trading costs or other expenses. It is not possible to invest directly in an index. Indexes are the property of their respective owners, all rights reserved. No bank guarantee May lose value NOT FDIC INSURED 8
OIL: KEEP AN EYE ON SUPPLY
INVESTMENT STRATEGY COMMENTARY MARCH 3, 212 OIL: KEEP AN EYE ON SUPPLY Northern Trust Global Investments James D. McDonald Chief Investment Strategist Daniel J. Phillips, CFA Investment Strategist Phillip
More informationChart 1: Global Rocking, Emerging Rolling SELECT INDEX PERFORMANCE
Let Freedom Ring? February 3, 11 Northern Trust Global Investments 5 South La Salle Street Chicago, Illinois 3 northerntrust.com James D. McDonald Chief Investment Strategist jxm8@ntrs.com Daniel J. Phillips,
More informationThe construction or provision of oil rigs, drilling. equipment, including seismic data collection.
The construction or provision of oil rigs, drilling equipment and other energy related service and equipment, including seismic data collection. Engaged in the exploration, production, marketing, refining
More informationYEARNINGS FOR EARNINGS
YEARNINGS FOR EARNINGS April 6, 215 Northern Trust Asset Management http://www.northerntrust.com/ investmentstrategy James D. McDonald Chief Investment Strategist jxm8@ntrs.com Daniel J. Phillips, CFA
More informationYIELD CURVE INVERSION: A CLEAR BUT UNLIKELY DANGER
1-year minus -year UST (%) INVESTMENT STRATEGY COMMENTARY YIELD CURVE INVERSION: A CLEAR BUT UNLIKELY DANGER December 4, 17 Investors focus on the yield curve with good reason an inverted curve has historically
More informationOil Markets and the US Economy
Investment Research Oil Markets and the US Economy Ronald Temple, CFA, Managing Director, Co-Head of Multi Asset and Head of US Equity David Alcaly, Research Analyst Global oil supply has been remarkably
More informationCOMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET
COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET AN INTERNATIONAL ENERGY FORUM PUBLICATION NOVEMBER 2018 RIYADH, SAUDI ARABIA NOVEMBER 2018 SUMMARY FINDINGS FROM A COMPARISON OF DATA AND FORECASTS
More informationWhat drives crude oil prices?
What drives crude oil prices? An analysis of 7 factors that influence oil markets, with chart data updated monthly and quarterly June 10, 2014 Washington, DC U.S. Energy Information Administration Independent
More informationNOT WORTH BEING CUTE SELLING OUT OF EXPENSIVE MARKETS HASN T ADDED VALUE HISTORICALLY
INVESTMENT STRATEGY COMMENTARY NOT WORTH BEING CUTE SELLING OUT OF EXPENSIVE MARKETS HASN T ADDED VALUE HISTORICALLY October 27, 2017 Some investors are expressing concern about stock market valuations
More informationCOMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET
COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET AN INTERNATIONAL ENERGY FORUM PUBLICATION SEPTEMBER 2018 RIYADH, SAUDI ARABIA SEPTEMBER 2018 SUMMARY FINDINGS FROM A COMPARISON OF DATA AND FORECASTS
More informationGlobal investment event Winners and losers from the recent oil price rally
For client use only Global investment event Winners and losers from the recent oil price rally Since mid-2017, oil prices have been on an upward trend. Strong oil demand growth, OPECled production cuts,
More informationLIGHT SWEET CRUDE OIL. Short term Update
24 th March 2008 Karvy Comtrade s LIGHT SWEET CRUDE OIL Short term Update Crude prices surpassed the psychological level of $100 and tested a high of $111.80 with funds interest supported by falling dollar
More informationC O M M O D I T I E S : A C R U D E A W A K E N I N G
GDP growth (percent) Performance (percent) C O M M O D I T I E S : A C R U D E A W A K E N I N G August 12, 2015 Northern Trust Asset Management northerntrust.com/ investmentstrategy James D. McDonald
More informationCOMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET
COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET AN INTERNATIONAL ENERGY FORUM PUBLICATION AUGUST 2018 RIYADH, SAUDI ARABIA AUGUST 2018 SUMMARY FINDINGS FROM A COMPARISON OF DATA AND FORECASTS
More informationManaging Volatility in Oil and Gas Revenues
Managing Volatility in Oil and Gas Revenues Presentation to the Revenue Stabilization and Tax Policy Committee September 12, 2008 Thomas Clifford, PhD Research Director New Mexico Tax Research Institute
More informationOIL-EXPORTING COUNTRIES: KEY STRUCTURAL FEATURES, ECONOMIC DEVELOPMENTS AND OIL REVENUE RECYCLING
OIL-EXPORTING COUNTRIES: KEY STRUCTURAL FEATURES, ECONOMIC DEVELOPMENTS AND OIL REVENUE RECYCLING This article reviews key structural features and recent economic developments in ten major oilexporting
More informationMARKET VOLATILITY - NUMBER OF "BIG MOVE" TRADING DAYS
M O O D S W I N G S November 11, 214 Northern Trust Asset Management http://www.northerntrust.com/ investmentstgy James D. McDonald Chief Investment Stgist jxm8@ntrs.com Daniel J. Phillips, CFA Investment
More informationMarket Bulletin November 17, 2014
Market Bulletin November 17, 214 What is behind the recent slump in oil prices? Anastasia V. Amoroso, CFA Vice President Global Market Strategist J.P. Morgan Funds Ainsley seye. Woolridge Market Analyst
More informationOil Markets: Where next?
Oil Markets: Where next? Christof Rühl, Global Head of Research Singapore September 2016 1 Content Oil and the economy: Recap Why did lower oil prices not support economic growth? OPEC vs. US two sides
More informationEcon 366. Fall 2012 The International Oil Market: The Cartel Era
Econ 366 Fall 2012 The International Oil Market: The Cartel Era A brief history of oil markets 4 major phases preceded creation of OPEC 1. Oil Rush in US (1859 1870) rush to buy land (landowner owns underground
More informationOIL PRICING AND VOLATILITY IN A MACRO AND MICRO VIEW
OIL PRICING AND VOLATILITY IN A MACRO AND MICRO VIEW By Jon Hammond Sr. Director EH Energy November 28, 2018 www.eulerhermes.us/energy Oil Pricing and Volatility in a Macro and Micro View 3 WORDWIDE OIL
More information2015 Oil Outlook. january 21, 2015
Epoch Investment Partners, Inc. january 21, 2015 2015 Oil Outlook john p. reddan, cfa, managing director & senior research analyst After trading in a range from $90-$110 per barrel from late 2010 through
More informationEconomic Summary. Visit us online at for the most recent market updates, Insights and Perspectives
Economic Summary During the June Meeting, the Federal Open Market Committee (FOMC) raised the federal funds rate by 25 bps to a range of 1.75% to 2.%. Encouraged by falling unemployment rates and rising
More informationCommodities Research What if Iran s oil returns to the market?
Investment Research General Market Conditions 2 November 213 Commodities Research What if Iran s oil returns to the market? Momentum seems to be growing in talks over Iran s nuclear programme as negotiations
More informationOil Value Chain & Markets. Global Oil Markets
Oil Value Chain & Markets Global Oil Markets World Oil Reserves WORLD OPEC Middle East Former Soviet Union Africa End 2006 End 2000 End 1990 End 1980 North America USA South & Central America Asia Pacific
More informationMONTHLY ECONOMIC NOTE APRIL 2011
MONTHLY ECONOMIC NOTE APRIL 211 OCTOBER 2 Analyst: Adedayo Idowu a.idowu@vetiva.com Global Oil and Food Prices; Drivers and Dependencies Prominent Themes Oil and Food prices are likely to remain important
More informationLooking Ahead on Oil & Gas
Looking Ahead on Oil & Gas Art Berman NACE Investor Speaker Luncheon Palm Beach Gardens, Florida March 16, 217 Slide 1 Oil Prices Fell Below $5 Floor Last Week: Deflation of the OPEC Expectation Premium
More informationCOMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET
COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET AN INTERNATIONAL ENERGY FORUM PUBLICATION JUNE 2018 RIYADH, SAUDI ARABIA JUNE 2018 SUMMARY FINDINGS FROM A COMPARISON OF DATA AND FORECASTS ON
More informationEconomic Summary. Visit us online at for the most recent market updates, Insights and Perspectives
Economic Summary At the August meeting, the federal funds rate remained unchanged after the Federal Open Market Committee (FOMC) agreed to leave it at the current range of 1.% to 1.25%. The dot plot was
More informationU.S. Economic Outlook: Where Innovation equals Opportunity. Jeff Korzenik Chief Investment Strategist
U.S. Economic Outlook: Where Innovation equals Opportunity Jeff Korzenik Chief Investment Strategist Where are we in the Business Cycle? Source: Bloomberg, The National Bureau of Economic Research 2 Where
More informationWorld Economic outlook
Frontier s Strategy Note: 01/23/2014 World Economic outlook IMF has just released the World Economic Update on the 21st January 2015 and we are displaying the main points here. Even with the sharp oil
More informationNews or Noise: A Closer Look at the Oil Market Meltdown
Asset Management News or Noise: A Closer Look at the Oil Market Meltdown By Russ Cearley, Partner, Director of Portfolio Strategy In late November, the Organization of the Petroleum Exporting Countries
More informationSelect U.S. Energy Stocks Poised to Benefit from Crude Oil Rebound
Select U.S. Energy Stocks Poised to Benefit from Crude Oil Rebound Key Takeaways: fstagnating f production combined with strongerthan-expected global demand could soon lead to a market rebalance. fflack
More informationU.S. Automotive Outlook
2004 FTA Revenue Estimation and Tax Research Conference September 19-22, 2004 Burlington, VT U.S. Automotive Outlook David P. Teolis Senior Economist North America Global Market & Industry Analysis Presentation
More informationChart 1. U.S. Personal Saving Rate and Household Debt (consu plus mortgage) as a % of Disposable Personal Incom
Chart 1 U.S. Personal Saving Rate and Household Debt (consu plus mortgage) as a % of Disposable Personal Incom 16% 14% 12% 10% 8% 6% 4% Last Points 4Q 2015- Saving Rate, 5.4%; HH Debt, 1 140% 130% 120%
More informationMacroVoices Oil Discussion: OPEC Can t Fix The Problem of Low Oil Prices
MacroVoices Oil Discussion: OPEC Can t Fix The Problem of Low Oil Prices Art Berman November 30, 2016 Slide 1 Overview: OPEC Can t Fix The Problem of Low Oil Prices OPEC may reach some agreement today
More informationEmerging Markets Debt: Outlook for the Asset Class
Emerging Markets Debt: Outlook for the Asset Class By Steffen Reichold Emerging Markets Economist May 2, 211 Emerging market debt has been one of the best performing asset classes in recent years due to
More informationRebalancing Economic Themes and Emerging Risks for the Balance of 2016
Rebalancing Economic Themes and Emerging Risks for the Balance of 2016 Page 1 Themes Oil s Not Well A world of cheap petroleum Eastern Anxiety China attempts a difficult transition Growing Prospects Central
More informationSaudi Chartbook. Summary. December 2014
December 1 Saudi Chartbook Summary Real Economy: Economic data for October showed signs of cooling. The non-oil PMI fell following a 39-month peak in the previous month. Data on consumer spending showed
More informationOil: An Ongoing Story of Supply and Demand
Oil: An Ongoing Story of Supply and Demand The new normal of oil prices The crude oil market has experienced a sea change since 214. Oil prices dropped sharply from above $1 in early 214, bottomed at $26
More informationCommercial Cards & Payments Leo Abruzzese October 2015 New York
US, China and emerging markets: What s next for the global economy? Commercial Cards & Payments Leo Abruzzese October 2015 New York Overview Key points for 2015-16 Global economy struggling to gain traction
More informationFlash Note Oil price. A market tilted towards oversupply. A widely expected agreement between OPEC and Russia. Unabated growth in global demand
FLASH NOTE Flash Note Oil price A market tilted towards oversupply Pictet Wealth Management - Asset Allocation & Macro Research 13 December 217 World oil demand is expected to expand at a sustained pace
More informationThe Economic Impact of Oil Prices
The Economic Impact of Oil Prices by Rurik Krymm During the last three months of 1973, the tax-paid costs of typical grades of crude petroleum in the main producing areas of the world, around the Persian
More informationWeekly Market Commentary
LPL FINANCIAL RESEARCH Weekly Market Commentary November 18, 2014 Emerging Markets Opportunity Still Emerging Burt White Chief Investment Officer LPL Financial Jeffrey Buchbinder, CFA Market Strategist
More informationOECD Interim Economic Projections Real GDP 1 Percentage change September 2015 Interim Projections. Outlook
ass Interim Economic Outlook 16 September 2015 Puzzles and uncertainties Global growth prospects have weakened slightly and become less clear in recent months. World trade growth has stagnated and financial
More informationJörg Decressin Deputy Director
World Economic Outlook October 13 Jörg Decressin Deputy Director Research Department, IMF 1 Outline Prospects for Advanced Economies Recent Developments and Implications for Emerging Economies Medium-term
More information2008 Economic and Market Outlook
Economic and Market Outlook Presented by: Gareth Watson Warren Jestin Vincent Delisle December 7 Economic Outlook Warren Jestin The Global Economic Landscape is Changing Rapidly Gears Down Emerging Powerhouses
More informationSAMPLE. INSIGHT & PERSPECTIVE Eye on Commodities. Supply Constraints / Geopolitics Lead the Complex
The long downtrend in the commodity market has reversed as prices have bounced off of a major technical price support level. Investors may want to take notice. INSIGHT & PERSPECTIVE Eye on Commodities
More information2015 Market Review & Outlook. January 29, 2015
2015 Market Review & Outlook January 29, 2015 Economic Outlook Jason O. Jackman, CFA President & Chief Investment Officer Percentage Interest Rates Unexpectedly Decline 4.5 10-Year Government Yield 4 3.5
More informationMacro Monthly UBS Asset Management May 2018
Macro Monthly UBS Asset Management May 018 What do higher oil prices mean for markets? Last month, the price of Brent oil reached USD 75, its highest level since 01. Just over two years ago, the dollar
More informationVanguard commentary April 2011
Oil s tipping point $150 per barrel would likely be necessary for another U.S. recession Vanguard commentary April Executive summary. Rising oil prices are arguably the greatest risk to the global economy.
More informationOCBC Crude Oil Outlook. Barnabas Gan Economist Global Treasury Research & Strategy 9 February 2017
OCBC Crude Oil Outlook Barnabas Gan Economist Global Treasury Research & Strategy 9 February 2017 1 Crude Oil OPEC and its compliancy 2 Executive Summary Crude oil prices remained volatile into the new
More informationCredit, Commodities, and Consumers: An Economic Update
Credit, Commodities, and Consumers: An Economic Update ROBIN J. ANDERSON, Ph.D. SENIOR ECONOMIST PRINCIPAL GLOBAL INVESTORS June 2015 All expressions of opinion and predictions in this report are subject
More informationPositioning Equity Portfolios for When Rates Rise
October 2017 Positioning Equity Portfolios for When Rates Rise The current equity bull market is now more than eight years old and has survived several calls for its demise. So far, it has weathered economic
More information2014 Annual Review & Outlook
2014 Annual Review & Outlook As we enter 2014, the current economic expansion is 4.5 years in duration, roughly the average life of U.S. economic expansions. There is every reason to believe it will continue,
More informationMonthly Bulletin. GCC single currency delayed
-6 Mar-6 May-6-6 Sep-6 Nov-6-7 Mar-7 May-7-7 Sep-7 Nov-7-8 Mar-8 May-8-8 Sep-8 Nov-8-9 Mar-9 Monthly Bulletin GCC single currency delayed 11 1.5 1 99.5 99 98.5 Revaluation pressure has abated (GCC currencies;
More informationGLOBAL ECONOMIC OUTLOOK
JULY 2018 GLOBAL ECONOMIC OUTLOOK Feeling the Pinch The world economy generally performed well during the first half of 2018. A handful of emerging markets struggled, but their problems were at least partially
More informationMarkets Have De-Valued Oil Prices: How Long Will It Last?
Markets Have De-Valued Oil Prices: How Long Will It Last? Art Berman MacroVoices September 2, 218 Slide 1 Comparative inventory: The most important approach to oil & gas price formation Ivnetories of Crude
More informationEconomic Outlook. William Strauss Senior Economist and Economic Advisor Federal Reserve Bank of Chicago
Economic Outlook CRF Credit & A/R Forum & EXPO Salt Lake City, UT October 23, 218 William Strauss Senior Economist and Economic Advisor Federal Reserve Bank of Chicago What I said In August The outlook
More informationAmerica s working families have
Center for American Progress Bush s Weak Dollar America s working families have been squeezed for most of this decade by stagnant wages and diminishing health and retirement benefits. Now they face new
More informationMajor Choke Points in the Persian Gulf and East Asia
Major Choke Points in the Persian Gulf and East Asia April 17, 2017 For Persian Gulf exporters and East Asian consumers, the free passage of oil shipments is essential. Originally produced on April 10,
More informationU.S. Economic Outlook and Monetary Policy
U.S. Economic Outlook and Monetary Policy March 26, 21 Craig S. Hakkio Senior Vice President and Special Advisor on Economic Policy Overview U.S. growth remains strong, though temporary factors are likely
More informationThe Lies We ve Been Told
The Lies We ve Been Told October 29, 2008 Role of Oil in US Energy Policy University of Southern Maine Conversations at Muskie Lucian Pugliaresi Energy Policy Research Foundation, Inc. Washington, DC www.eprinc.org
More informationWILL GOLD CONTINUE TO SHINE?
LPL RESEARCH WEEKLY MARKET COMMENTARY March 7 216 WILL GOLD CONTINUE TO SHINE? Burt White Chief Investment Officer, LPL Financial Jeffrey Buchbinder, CFA Market Strategist, LPL Financial KEY TAKEAWAYS
More informationGrowing for nearly a decade. 114 months and counting, through December Will become longest Post-War expansion if it lasts through July
Economic Update Closing in on Expansion Record Byron Gangnes Professor of Economics Senior Research Fellow, UHERO University of Hawaii at Manoa VLI February 219 Hawaii Island Growing for nearly a decade
More informationOPEC extends oil output cut through March 2018
Economics Research Desk Market Highlights: Oil & Gas update 25 May 2017 OPEC extends oil output cut through March 2018 Oil prices swung between sharp gains and losses in volatile trade on Thursday, after
More informationSerious Doubts Remain despite Encouraging Signs
APRIL 18, 2019 ECONOMIC & FINANCIAL OUTLOOK Serious Doubts Remain despite Encouraging Signs #1 BEST OVERALL FORECASTER - CANADA HIGHLIGHTS ff The global economy and the volume of trade both remain fragile,
More informationThe Oil Supply Outlook in the New Oil Price Environment: The Long and Short Term Investment Cycles
The Oil Supply Outlook in the New Oil Price Environment: The Long and Short Term Investment Cycles Bassam Fattouh Oxford Institute for Energy Studies OIES OIL DAY, ST CATHERINE'S, OXFORD, NOVEMBER 17 215
More informationGCC/ MENA macro outlook. Khatija Haque, Head of MENA Research March 2018
GCC/ MENA macro outlook Khatija Haque, Head of MENA Research March 18 1 % y/y GCC: Is the worst behind us? Average GCC GDP growth 1 and 17 have been challenging on a number of fronts for the GCC. Lower
More informationRussia: Macro Outlook for 2019
October 2018 Russia: Macro Outlook for 2019 Natalia Orlova Head of Alfa Bank Macro Insights +7 495 795 36 77 norlova@alfabank.ru Egypt Saudi Arabia Brazil S. Africa UAE Iraq China Japan US Mexico UK Russia
More informationFinland falling further behind euro area growth
BANK OF FINLAND FORECAST Finland falling further behind euro area growth 30 JUN 2015 2:00 PM BANK OF FINLAND BULLETIN 3/2015 ECONOMIC OUTLOOK Economic growth in Finland has been slow for a prolonged period,
More informationThe international environment
The international environment This article (1) discusses developments in the global economy since the August 1999 Quarterly Bulletin. Domestic demand growth remained strong in the United States, and with
More informationOil price volatility: Focus on the fundamentals to navigate your way to long-term rewards
Oil price volatility: Focus on the fundamentals to navigate your way to long-term rewards December 2014 Oliver Bell, Portfolio Manager, Middle East & Africa; Global Frontier Markets Equities Strategy EXECUTIVE
More informationMarket Month: August 2018 The Markets (as of market close July 31, 2018)
Market Month: August 2018 The Markets (as of market close July 31, 2018) Favorable economic indicators and encouraging corporate earnings reports helped propel stocks forward in July. Market growth has
More informationPortfolio Strategist Update from BlackRock Active Opportunity ETF Portfolios
Portfolio Strategist Update from BlackRock Active Opportunity ETF Portfolios As of Sept. 30, 2017 Ameriprise Financial Services, Inc., ("Ameriprise Financial") is the investment manager for Active Opportunity
More informationCommodities: A Crude Awakening
Commodities: A Crude Awakening August 20, 2015 by Jim McDonald of Northern Trust Commodity prices have been under significant pressure over the last year, due to a multitude of factors. Emerging market
More informationThe GCC 2012: Flash Economic Update
Report Series The GCC 2012: Flash Economic Update Executive Summary Although the news has been mixed, recent global developments have been generally positive for the GCC. Most significant for growth prospects
More informationMarket Bulletin. July 30, Preparing for Liftoff: The impact of rate hikes on stock returns
July 30, 2014 Preparing for Liftoff: The impact of rate hikes on stock returns James C. Liu, CFA Global Market Strategist J.P. Morgan Funds Anthony M. Wile Global Research Analyst J.P. Morgan Funds Tai
More informationGlobal Assumptions. Global Outlook
cc hh aa pp t et e r r 7 1 BMI Political Global Outlook Assumptions Global Assumptions Global Outlook In line with our view that the global economy is stabilising, there have been very few changes to our
More informationGlobal Markets Update QNB Economics 15 October 2017
Global Markets Update QNB Economics 15 October 2017 Executive Summary Key Takeaways US yields fell after inflation came in lower-than-expected; Turkish rates rose after a diplomatic dispute with the US
More informationFourth Quarter Market Outlook. Kim Huebner, CFA Don Powell, CFA Joseph Styrna, CFA
Fourth Quarter 2017 Market Outlook Kim Huebner, CFA Don Powell, CFA Joseph Styrna, CFA Economic Outlook Growth Increasing, Spending Modest, Low Unemployment 2017 2016 2015 2014 2013 2012 2011 GDP* Q3:
More informationMiddle East and North Africa Regional Economic Outlook
Regional Economic Outlook Morocco Algeria Tunisia Libya Lebanon Egypt Syria Iraq Iran Jordan Saudi Kuwait Arabia Bahrain Afghanistan Pakistan Mauritania Sudan Djibouti Qatar Yemen Oman United Arab Emirates
More informationJune 2018 Monthly Commodity Market Overview Newsletter. Stock Index Futures. By the ADMIS Research Team
June 2018 Monthly Commodity Market Overview Newsletter By the ADMIS Research Team Stock Index Futures Stock index futures performed well in spite of increased global trade tensions. In fact NASDAQ and
More informationWTO lowers forecast after sub-par trade growth in first half of 2014
PRESS RELEASE PRESS/722 26 September 214 (-) WTO lowers forecast after sub-par trade growth in first half of 214 TRADE STATISTICS WTO economists have reduced their forecast for world trade growth in 214
More informationB-GUIDE: Market Outlook
Quarterly Market Outlook: Quarter 1 2018 on 5 th January 2018 Investment Outlook for 1 st Quarter 2018 Accelerating Global Economy Supports the Rising Earnings Equity Thailand US Europe Japan Asia Bond
More informationAlgeria's GDP growth is expected to stand at 3.5%, inflation at 7.5% for 2018.
Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Key Messages: MENA Economic Monitor- April 2018 Economic growth in MENA is projected
More informationGlobal economy in charts
Global economy in charts Ian Stewart, Debapratim De, Tom Simmons & Peter Ireson Economics & Markets Research, Deloitte, London Summary 1. Global activity easing 2. Slowdown most apparent in euro area 3.
More informationGlobal Macroeconomic Monthly Review
Global Macroeconomic Monthly Review April 2019 Dr. Gil Michael Bufman, Chief Economist Arie Tal, Research Economist Economics Department, Capital Markets Division 1 Please see disclaimer on the last page
More informationPNC Investment Perspective
March/April 2014 PNC Investment Perspective Decoupling of Developed and Emerging Markets? Jim Dunigan Mr. Dunigan is Executive Vice President and Managing Executive, Investments for PNC Asset Management
More information1. What will the global economic recovery be like? Anaemic growth, perhaps even a double-dip? Key questions 2. How will oil demand respond to renewed
IEA/IEEJ Forum on Global Oil Market Challenges Global oil market outlook Dr. Leo P. Drollas Deputy Director and Chief Economist Centre for Global Energy Studies Tokyo 26 th February 2010 1. What will the
More informationOil price. Laura Lungarini
Oil price Laura Lungarini Agenda Crude oil market What is behind oil price Fundamentals Main Players Geopolitics Financial market The price determinant Benchmark crude oils Brent Physical and paper market
More informationOBSERVATION. TD Economics U.S. INFLATION LIMBO HOW LOW CAN IT GO?
OBSERVATION TD Economics U.S. INFLATION LIMBO HOW LOW CAN IT GO? Highlights Inflation in America is slowing. The consumer price index (CPI) rose 1.7% year-over-year in September, down from.1% in August.
More informationQuarterly Market Review: April - June 2018 The Markets (as of market close June 30, 2018)
Quarterly Market Review: April - June 2018 The Markets (as of market close June 30, 2018) The second quarter of the year can be called a lot of things, but boring isn't one of them. The potential for a
More informationPMI and economic outlook
PMI and economic outlook Chris Williamson Chief Business Economist, IHS Markit 1 st November 2017 2 PMI coverage Current coverage Expansion pipeline 40+ Countries covered 27,000+ Companies surveyed every
More informationThe Persian Gulf s predominance endangered? Amrita Sen, 13 November 2013
The Persian Gulf s predominance endangered? Amrita Sen, 13 November 2013 The sudden burst of shale was viewed as a key threat to OPEC US oil production North Dakota oil production 12.0 1.0 11.0 10.0 9.0
More informationCanadian Economic Outlook Private Sector Forecasts
Page 1 of 7 EX-99.C.5 2 d29243dex99c5.htm EX-99.C.5 Exhibit C-5 Backgrounder Canadian Economic Outlook Canadian Economic Outlook Private Sector Forecasts The average of private sector economic forecasts
More informationOil has rebounded but energy equities have lagged. Is it over already?
Oil has rebounded but energy equities have lagged. Is it over already? Energy equities have underperformed the S&P 500 materially over the last five years. While spot oil prices have risen significantly
More informationINVESTMENT OUTLOOK JUNE 2018 MACRO-ECONOMICS. Developed and Emerging Markets
INVESTMENT OUTLOOK JUNE 2018 MACRO-ECONOMICS Developed and Emerging Markets Trade tariffs and protectionist themes have dominated global markets throughout the year and risks have further heightened through
More informationRECOVERY CONTINUES FOR LOGISTICS REAL ESTATE
RECOVERY CONTINUES FOR LOGISTICS REAL ESTATE World events trigger soft patch The global economic soft patch in the first half of 2011 was primarily caused by the cost of oil reaching $114 per barrel, rising
More informationEconomic and Market Outlook
Economic and Market Outlook Third Quarter 2018 Investment Products: Not FDIC Insured No Bank Guarantee May Lose Value Past performance is no guarantee of future results. Financial term and index definitions
More information