Oil & Energy Investor by Dr. Kent Moors

On Inversions and the Price of Oil

by | published August 16th, 2019

Crude oil prices were showing signs of stabilizing this morning after one of the more volatile weeks in recent memory. Much of this instability resulted from ongoing concerns about global demand, themselves in turn fueled by angst over a worldwide recession.

As I have noted here in Oil & Energy Investor on several previous occasions, that view is based more on sentiment than anything else.

The tangible data justifying it is a full six months into the future. Prior to the numbers hitting, this is all fodder for speculators to run short moves in a true Chicken Little “The Sky is Falling” motif.

Nonetheless, it does have an effect and the rising concerns of a global slowdown do have an impact in how much oil analysts believe the world economies will require.

Of course, the next geopolitical tension blowup or transport interruption promptly causes the pendulum t swing in thither direction. For a bit, supply overcomes demand as the target of attention and prices spike back up.

One thing is certain. Any approach regarding the energy sector as independent from other considerations is as artificial as a three-dollar bill.

However, another aspect of the “impending recession doom” view hit this week and resulted in an immediate downward pricing pressure on oil.

This is the bond yield inversion

The London Move to Electric Cars is Serious Business

by | published August 14th, 2019

Anybody who travels to European cities on a regular basis can tell you about the plans afoot to clean up urban air.

Several of these cities, Frankfurt for example, have restricted or outrightly banned diesel vehicles. Others, like Paris, are limiting access for motor bikes during certain parts of the week. And many have frequent readings of air quality, changing traffic patterns and access routes accordingly.

Much of this is the result of all European nations signing on to the Paris Climate Agreement. But by any measure, there is overwhelming public support for the changes.

It has even led to some initiatives taking hold in which people are encouraged to leave the car at home and take public transport or trains. It probably helps that in Europe, unlike the U.S., intercity rail transport actually works.

Norway is the leading electric car nation in the world, with Oslo the number one city for such vehicles. Meanwhile, Stockholm, Copenhagen, Dublin, and even Madrid have begun, or are well into, confronting the problems of central city air quality.

Well, one these days we’ll need to add London to the growing list…