Why Brexit is Hiking UK Power Prices – and the Worst is Yet to Come

by | published July 26th, 2016

History tells us that the winter of 1946-1947 was one of the worst experienced by the UK in a century – and the coldest in three.

Coming so soon after the end of World War II, an already crippled economy felt the full impact of freezing weather that killed both livestock and crops, while jamming roads and railways with snow.

It got so bad that at one point, Winston Churchill observed that he couldn’t even get his favorite cigars.

But the main concern was the provision of electricity. Not a single power-generating station in all of England had escaped wartime destruction, and a return to “normalcy” in the power sector was still years away.

So during the cold winter of 1946-1947 the entire British population had to hunker down.

Now, the current situation is hardly as dire. But ever since the UK voted to separate from the EU (the co-called “Brexit” referendum) on June 23, I’ve been waiting for the initial signals that this divorce will have consequences in the energy sector.

Now we have one, with dire consequences for British consumers…

This “Demand Dynamo” is Where Oil Prices are Really Set

by | published July 19th, 2016

WTI (West Texas Intermediate, set in New York) and Dated Brent (set in London) may be the dominant benchmarks for crude oil trading, but that doesn’t really tell the story.

Just because these prices are set daily in New York and London hardly means that the U.S. and European markets are calling the shots.

Far from it.

And analysts are finally coming to understand that the true price of oil is no longer determined in the West.

The so-called “mature” developed economies may still hog oil finance (at least for the time being), but the country driving demand for the actual crude, and the products derived from it, lies elsewhere…

And no, it’s not China…