The consensus with which I agree is that the Euro zone is heading into a recession. While the economic activity has somewhat improved over the last months in the U.S. I remain doubtful whether the U.S. can escape the recession when Europe enters one. The data coming from China doesn’t (jet) point to a hard landing. For the time being it looks like that the Chinese government is in control. The measures to contain inflation and raising real-estate prices are successful, while in the same time China is has taken early steps to increase domestic consumption and re-balance the economy. One should not disregard and keep close watch on soft data coming from China especially in real estate and commodity related industries which are not reflected in the official data and could be pointing to serious issues.

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Leading economic indicators are pointing to a recession. At the time being it looks like it could be a mild one, but taken into account all the unknowns (EMU future, China slowdown, bank balance-sheet question) it could easily develop into something more ominous.

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Global economic growth is clearly slowing down.

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Mostly unchanged from April…

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I have lost flair in making predictions. I even started to think that correct forecasting is impossible. Maybe it is better to look at forecasting only as to the extent “what if” exercise. That’s why this is the first strategy post this year.

I have to come to conclusion that the only relevant judgement on is made by market and this is the key in being a successful in this line of business. What is fair, what is right or what is logical are completely irrelevant questions in speculating. Fundamentals are most of the time only a peripheral factors affecting the prices; in fact fundamentals are major factor only in times of great excesses.

Now, lets get back to writing down my current mind setup.

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I was wrong on the assumption that West will let Gaddafi win the war in Libya. U.N. approved military intervention will keep the Libyan oil out of the markets for longer then previously thought. This is positive for crude oil price.

Concerning Japan it is reasonable to assume increased derivatives demand, also positive for oil price.

In the U.S. the gasoline draw is looking quite impressive (although it is not demand driven, rather a product of refiner discipline). This could help clear Cushing stockpile glut and close the WTI – Brent pricing gap.

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Japanese official reports are quite scarce, so this is my inferring based on what is not said rather than on what is said.

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I try to post diverse opinions (too much Marc Faber lately), but this video is so fun, especially seeing CNBC hosts so shocked with Marc Faber views that they lose the ability to ask any kind of questions.

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Things got much worse during the night…two additional reactors exploded and radiation got out to atmosphere.

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My thoughts are with the earthquake and tsunami victims in Japan. If you would like to help, you can make a donation via. the International Federation of Red Cross and Red Crescent Societies (IFRC) web site.

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Fukushima I Nuclear Power Plant Reactor 3 explosion on March 14, 2011.

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Baltic Dirty Tanker Index fell 1.9%; Baltic Clean Tanker Index was unchanged.

Japan earthquake effects: I seems that Japanese crude oil demand will initially fall because one fifth of Japanese refinery capacity is offline, but subsequently will rise fast because only possible substitution to nuclear electricity generation (one fourth off-line and years needed to bring it back on-line) is gas and oil-fired generation. Product demand (residual fuel oil and diesel fuel especially) will rise fast in coming days.

To sum up, near term positive for product tankers, negative for crude oil carriers. Longer term positive for both. Positive for LNG carriers.

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In the last months global economic outlook has improved a bit. In U.S. we can see signs of personal consumption and manufacturing activity growing at soft rates, but growing; at the same time employment, housing, construction spending, durable goods orders are stagnating. Fall in initial jobless claims is clearly being offset by inflow of people into the workforce; job creation still weak.

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After frustrating American and Asian sessions, looks like the markets have calmed down. After opening sharply lower European equities are trading at -0.6%. What to say on the U.S. action yesterday? Maybe only that the technology has evolved since Black Monday in 1987 and the trading programs were shut down (changed) very fast enabling the […]

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Markets still focus on Europe and in particular Greece. There are some rumors today  that Unicredit and Deutsche bank have ceased to accept Greek government bonds as a collateral; there are also some rumors that the capital flight from Greece is reaching alarming levels. It looks the Greece story is approaching its climax and  we […]

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