Freedom of navigation on the open seas is sine qua non for a well-functioning oil market – everything from getting supplies to refiners to getting products to consumers depends on it. Oil is a globally traded, waterborne…
Highlights So What? Geopolitical risks are not about to ease. Why? Fiscal policy becomes less accommodative next year unless politicians act. Financial conditions give President Trump room to expand his tariff onslaught. Our…
Supply - demand fundamentals point to higher oil prices going forward. Our expectation regarding OPEC production remains unchanged: The original cartel led by the Kingdom of Saudi Arabia (KSA) will maintain production discipline this…
Oil prices continue to reflect heightened policy risk ranging from continuing Sino – U.S. trade-war tensions; new tariff threats against Mexico from the Trump administration; global growth concerns, which are fueled by…
Crude oil price volatility surged over the past week, and likely will remain elevated. Underlying prices continue to reflect heightened policy risk ranging from continuing Sino – U.S. trade-war tensions; new tariff threats against…
Highlights So What? U.S.-China relations are still in free fall as we go to press. Why? The trade war will elicit Chinese stimulus but downside risks to markets are front-loaded. The oil risk premium will remain elevated as Iran…
Highlights In the political economy of oil, an awareness of the speed at which policy in systematically important states can change can restrain risk taking and investment. This can keep markets in an agitated state of anticipation,…
Highlights The risk premium in crude oil prices is rising again, as policy risk – and the potential for large policy-driven errors – increases (Chart of the Week).1 This is not being fully reflected in options markets, where…
Highlights We’ve searched in vain for imminent domestic weakness in the U.S. economy, … : Much of our work this spring has focused on trying to poke holes in our view that the equilibrium fed funds rate remains above the…
The Iranians, for their part, are unlikely to leap to the most aggressive forms of retaliation immediately – such as fomenting unrest in Iraq – because of their economic vulnerability. Small acts of sabotage or…