Showing posts from January, 2019

Energy Commodity Price Forceasts

Gasoline Gasoline prices regained some ground at the start of the year and, on 11 January, reformulated blendstock for oxygenate blending (RBOB) gasoline traded at USD 1.55 per gallon. This was up 4.5% from the same day last month, was 0.8% lower on a year-to-date basis, and was down 17.2% from the same day last year. Gasoline prices fell further in late December in line with the fall in global crude oil prices and on weaker-than-normal holiday demand. A report by the EIA showed gasoline demand for the week ending 28 December was the lowest in nearly two years. Moreover, gasoline stocks rose higher in the period, signaling ample supply. Prices, however, have bounced back in anticipation of tighter supply. Prices are expected to pick up later this year as OPEC and its allies trim output in order to boost crude oil prices. FocusEconomics panelists expect gasoline to trade at an average of USD 1.81 per gallon in Q4 2019 and USD 1.71 per gallon in Q4 2020.

Dry Gas Natural gas prices have…

Turkey Economics In Peril Jan. 2019

Is Turkey in complete shambles?
The economy likely recorded a dismal fourth quarter, as the impact of the August 2018 currency crisis continued to reverberate. The manufacturing PMI was firmly in contractionary territory throughout the period on shrinking output and new orders, while business sentiment was decidedly pessimistic. Moreover, consumer spending was hit by higher interest rates, still-elevated inflation and depressed household sentiment, with retail sales declining sharply in October and vehicle sales plummeting throughout Q4. This comes after comprehensive data showed that GDP growth slowed sharply in Q3 on soft private consumption and fixed investment. More positively, the lira has recovered substantial ground since September, while external rebalancing continues apace, with a third consecutive monthly current account surplus in October. On the political front, President Erdogan announced a second 100-day plan in December. According to the president, it contains projects …

Saudi Arabia Deteriorates

The economy benefited from increased crude oil production and higher prices for the black gold in the third quarter, prompting GDP to expand at the fastest pace in two-and-a-half years. Although growth in non-oil private activity accelerated slightly, it remained low compared to historical figures. Subdued dynamics in the private sector, a rising unemployment rate and low levels of foreign investment are casting doubts over the much-trumpeted Saudi Vision 2030. In order to shore up economic growth, on 18 December, the government announced an expansionary budget for 2019, which focuses on boosting capital expenditure. Analysts, however, warn that the projected revenues could be on the optimistic side. While the implied price is about USD 70 per barrel, oil prices have fallen in recent weeks and hit an over one-year low of USD 50.1 per barrel on 26 December.
The economic recovery should broaden this year due to renewed fiscal stimulus, which should support domestic demand. Although the…