The Great Debate

Forecasting and its discontents

August 27, 2010

“Prediction is very difficult, especially if it’s about the future,” is attributed to a long list of people. Even with that in mind, however, the first eight months of 2010 have been especially unkind to professional forecasters and investors as markets have lurched between extremes of pessimism and optimism.

Speculators abandon oil for the moment

August 23, 2010

Bullishness about the short-term prospects for crude is evaporating among banks and hedge funds, as the market fails to sustain rallies above $80 and girds for widespread refinery shutdowns to work off bulging gasoline stocks.

Micro and macro volatility in the oil market

July 20, 2010

- John Kemp is a Reuters market analyst. The views expressed are his own –

“Most probably we will continue to have reasonably high short-term volatility but in a narrower price range between $60-95 per barrel”.
That was the (accurate) forecast for crude oil prices given by Mercuria’s head of trading Daniel Jaeggi to the UN Commodities Forum in Geneva back in March [ID:nLDE62M0MT].
In fact front-month futures <CLc1> have been trapped in an even narrower range of $60-86 for the past 12 months, shrinking to $64-86 so far in 2010. Spot prices have barely budged since July last year, despite a substantial improvement in demand, as one puzzled investment bank noted recently.
Yet many traders complain high volatility is making either directional or technical strategies difficult to implement.
The apparent contradiction (high levels of very short-term price movement in a market trending sideways) highlights the different levels of volatility prevailing at different time horizons.

The darkest period before dawn?

July 12, 2010

Commodtrader

Abandon hope all ye who enter here was the inscription written above the gates of Hell in Dante’s Divine Comedy.

from The Great Debate UK:

Facebook group defends “harassed” BP

June 18, 2010

OIL-SPILL/

BP’s chief executive Tony Hayward branded “the most hated man in America” may be surprised to find himself cast in the role of victim by a growing clan of web-based supporters on Facebook.

Don’t bank on return of backwardation

May 20, 2010

Many energy analysts are predicting the crude market will move into backwardation before the end of the year.

Money illusion and “real backwardation” in oil

May 17, 2010

Forward commodity prices are not properly accounting for the impact of inflation.

Weak fundamentals bite back in oil

May 12, 2010

The past month has seen weak near-term fundamentals reassert themselves over bullish sentiment about the medium-term outlook in oil markets.

Peak demand leaves refineries idle

March 1, 2010

– John Kemp is a Reuters columnist. The views expressed are his own –

Anything but oil

December 21, 2009

kemp.jpg– John Kemp is a Reuters columnist. The views expressed are his own —