Last week, we had put up a perplexed post, wondering out loud as to why some prominent Democratic senators (Charles Schumer, John Kerry, and Claire McCaskill) were calling to block contracts being signed between oil companies and the Iraq government. Narrowly, these deals would help get the faltering country back on its feet economically, both […]
Read more...Alert readers pointed us to new sightings of heightened credit market worries from Barclays via the Telegraph and Bill Fleckenstein via Calculated Risk. What distinguishes them from normal patter about the debt markets is the urgency of their alarms (hat tip Dwight and doc) The irony here is that the Fed, as Tim Duy points […]
Read more...Daniel Dicker, a former oil trader writing at TheStreet.com, contends that there is a way to test the hypothesis that speculation is influencing oil prices (a view that Dicker supports). Exchanges could impost a “liquidiation only” requirement, which was last used to break the Hunt brothers’ attempted corner of the silver market in the early […]
Read more...Some readers have suggested increasing tariffs as a way to reduce our trade deficit and shield US workers from foreign competition. High energy prices may be having the same effect. Increased transportation costs are leading companies to rethink how they source their products and shift to local producers where possible. A Financial Times story discusses […]
Read more...Please have a look at our article, “Barrel Fever: Does Anyone Know How Much Oil There is in the World?” We’ve covered some of the same ground in posts here, but hopefully readers will still enjoy it.
Read more...Although we don’t always agree with his views, we are fans of Thomas Palley posts because he is willing to question economic orthodoxy. We were particularly taken with his piece, “Demythologizing Central Bankers and the Great Moderation.” In his latest offering, Palley disputes the idea that the recent runup in oil prices is entirely the […]
Read more...Have you ever watched a movie and suddenly hit a section that doesn’t quite make sense? Usually, I figure I missed a crucial twist, like a envelope being slipped to the chief baddie, or the fact that the receptionist is the detective in the opening scene. I’m throwing this one open to readers, because it […]
Read more...More signs of high gas prices leading to reduced demand. The Bloomberg article is written somewhat unclearly. The 2.7% fall in retail gas purchases is in comparison to the prior year.. From Bloomberg: U.S. gasoline demand fell 2.7 percent last week, a sign motorists are cutting back on vacation plans as pump prices touchrecords, a […]
Read more...There has been ample speculation on whether the Saudis are truly close to tapped out as far as current oil production is concerned. The overwhelming majority believes that declining production is due to falling yields from their biggest oilfield, Gwahar, which has not been fully compensated for by increased output from other fields. A minority […]
Read more...Some optimists on the agriculture front, such as Nobel prize winning economist Gary Becker, have argued that increasing the productivity of farming would solve the problem of skyrocketing grain and food commodity prices. Only roughly 30% of crop-raising is done according to advanced techniques; if much of the rest of the land under cultivation was […]
Read more...An oil economics specialist, Mamdouh Salameh, who advises the World Bank and the UN Industrial Development Organisation, contends that oil prices would be at less than 1/3 of their current level had the US not invaded iraq. We’ve noted before that Iraqi reserves somehow gets overlooked, which is odd. Iraq’s production has fallen further than […]
Read more...In a VoxEU post, Guillermo Calvo argues forcefully that rising commodity prices are the result of excess liquidity rather than supply and demand. From VoxEU: Here, one of the world’s leading macroeconomists argues that the explosion of commodity prices is the result of a very real global financial storm associated with excess liquidity in several […]
Read more...China had said it would increase fuel prices, which are heavily subsidized, in a statement last month, but had not given any timetable for its actions. Most observers had assumed any change would take place after the Olympics. In a surprise move, perhaps impelled by inflation concerns, the Chinese announced a price hike effective tomorrow. […]
Read more...Faithful readers, I hope you don’t mind if I am less chatty than usual today, since I had some competing obligations, plus some of the material on offer stands on its own. In the “pets.com redux” category, a reader pointed out this Wall Street Journal story: Excitement over oil is surging in Brazil…. After creating […]
Read more...The Financial Times reports today that refiners are paying prices higher than those indicated by the futures market for the lightest, meaning best, grades of crude oil. This points to an issue raised in an earlier post, namely, that to the extent oil supplies are tight, it’s due to demand for sweet crude, which has […]
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