Spent June 27-28 at the Platts Bunker & Residual Fuel Oil Conference in Houston, smoothly hosted by John-Laurent Tronche (managing editor, US oil markets). An array of in-house experts presented, including Richard Swann (editorial director, Americas oil), Barbara Troner (managing editor, Americas tankers), and Shu Hui Goh (editor, fuel oil and bunkers, Asia Pacific and Middle East).
This S&P Global Platts quartet was joined by an illustrious and entertaining cast of panelists featuring Mikkel Søholm Vestergaard of Dan-Bunkering, Will Bathurst of Peninsula Petroleum, Al Troner of Asia Pacific Energy Consulting and Adrian Tolson, a towering figure in the bunker industry.
We were treated to ominous talk of ever-stricter sulfur regulations and scrubbers, middling tanker rates and miserable bulk freight markets, the lingering, menacing ghost of OW Bunker and Singapore’s complicated bunker scene.
Discussion then shifted to Mexico and its transformation from an exporter of commodities to a world class manufacturer, and south to the Panama Canal and the emerging implications of its widening for world trade.
But in the bunker and shipping markets, confusion reigns: the largest and most admired bunker company vanishes overnight. Charter rates hit historic bottom only to sink even further. Only the unexpected is to be expected.
This immediately recalled a recent opinion piece in the The Wall Street Journal, in which former US Treasury Secretary Roger Altman declared economic and financial prediction to be a dead art.
Consider: oil prices were definitely going to remain above $100/b, yet proceeded to drop into the twenties; Brazil and Russia, crowned as economic powerhouses set to grow at 4% find themselves mired in deep recession. Interest rates were headed only up, but actually dipped.
Why? Trillions of financial investor dollars zooming around the globe every single day in search of profits, driving the price of stocks, commodities and rates up and down. Prices often bear little relationship to fundamentals, distorting our view of the true economic state of affairs.
“Finance,” Altman avers, “now represents the most powerful force on earth, even beyond nuclear weapons. Commodity prices, corporations and governments are increasingly at its mercy. Which is why reliable economic and financial forecasting may be history.”
Words to the wise: yes, expect the unexpected. But equally, don’t expect the expected.
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