FT : Qatar pushing ahead with LNG expansion despite slumping demand

Qatar pushing ahead with LNG expansion despite slumping demand
State-owned Qatar Petroleum also eyeing investment opportunities overseas

Qatar is forging ahead with the expansion of the world’s largest liquefied natural gas project and eyeing investment opportunities overseas despite a slump in global energy demand and the collapse of oil prices.

Saad al-Kaabi, the country’s energy minister and chief executive of Qatar Petroleum, said commercial bids for the project in the North Field, the planet’s biggest natural gasfield, would be delayed because of the Covid-19 pandemic but insisted that all contracts would be awarded by the end of the year.

“The North Field expansion project is moving full steam ahead, no delay there. The only issue is because of Covid and suppliers and so on,” Mr Kaabi said in a briefing with the US-Qatar Business Council. “In my view, you continue your plan and invest in the bad times because these projects are long term.”

The project will increase Qatar’s production capacity from 77m tonnes of LNG per annum to 110m by 2025, which could rise to 126m tonnes two years later. The move should help the small Gulf state regain the title of the world’s top LNG producer from Australia at a time when other projects have been thrown into doubt by the pandemic.

LNG prices have fallen to record lows in Asia, the centre of demand growth for the supercooled fuel, as the economic impact of the health crisis has curbed gas consumption by industry.

“There’s a lot of demand for gas around the world . . . it’s slowed down definitely because of the pandemic, prices have been low,” Mr Kaabi said. “But for us to feel the pain prices would need to be very low . . . We are going to expand and if there is room to go above 126m [tonnes per annum] you might hear us in a few years go for it.”

He said that while Qatar Petroleum was cutting costs by about 30 per cent, there was “absolutely no way” the wealthy Gulf state would be reducing its production as large oil exporters have been forced to do in a bid to stem the slide in crude prices.

“Once you have an issue with demand the most expensive people go out first, they can’t sell. So I think a whole bunch of people would have to close down LNG before it gets to us,” Mr Kaabi said. “There’s absolutely no way we will be reducing production.”

He added that the turmoil in energy markets could also create opportunities for state-owned Qatar Petroleum to accelerate its investment in international projects.

“There are opportunities that will arise and we are a company that has resources and we are in a very good financial position,” Mr Kaabi said. “Fortunately for us we may be able to take advantage of some of the situations and we can enter maybe at a better deal.”

This month, Qatar Petroleum reached agreements on three blocks in the Campeche offshore basin in Mexico and reached an agreement with Total, the French energy company, to acquire a 45 per cent participating interest in two offshore blocks in Ivory Coast.

The North Field expansion project has attracted huge interest from the world’s energy majors including Total, Royal Dutch Shell, ExxonMobil and ConocoPhillips, as well as others that see it as an opportunity to invest in a fuel expected to remain more resilient than oil because of its lower emissions.

Qatar Petroleum is seeking to secure partnerships for projects overseas with the same companies and is leveraging the North Field development to boost its international expansion plans.

The global LNG market has grown rapidly in recent years, spurred by new projects in Australia and Russia and the emergence of the US as a significant exporter as the shale boom created ample supplies. However it is also fiercely competitive with many planned projects predicted to struggle to make it to completion without a quick recovery in prices internationally.

“The next few months are highly uncertain but the fundamentals of gas haven’t changed on a long-term basis — we will need more LNG supplies,” said Frank Harris at consultancy Wood Mackenzie. “When many of their rivals are logjammed it’s the perfect opportunity for Qatar to push ahead.”

Mr Kaabi said that integrated oil and gas companies in the US would still thrive but cast doubt on the ability of “single players” terminal developers to make it work. “It’s the people who can do it at the right cost structure,” he said.

>>> Week-end Newspapers Summary

NEW YORK TIMES
Saturday
• With Washington focused on the pandemic, Chinese president Xi Jinping “has made one of his boldest political gambits yet, wagering that he can tame Hong Kong through national security legislation, despite the risk of fresh upheavals there and a new flash point with the US.”
• As the country reopens, employers are looking into how to safely bring back their workers, with a major question being whether they should test for the coronavirus, an issue about which there is little clear guidance from state and federal agencies.
• Medical officials in New York plan to collect blood from dozens of children in the city to determine whether they share any genetic variations that might make them susceptible to a mysterious syndrome linked to the coronavirus.
• Trump on Friday declared places of worship “essential” operations that should hold services in person this weekend regardless of state quarantine orders stemming from the coronavirus pandemic, though it’s unclear what power he has to override governors in this area.
• Trump, eager to reopen the economy, has begun questioning the official coronavirus death toll, suggesting the numbers, which have hobbled his approval ratings and harmed his re-election prospects, are inflated.
• When Congress created inspector generals in 1978, it expected them to be dispersed among federal agencies “not as a compliant team, but as referees, charged with rooting out corruption, waste, malfeasance and illegality”—but Trump is attacking their ability to investigate his administration.
• Two years after Democrats swept the midterm House elections by a historically wide margin and with historically high turnout, polling suggests they have a shot at a similar showing this year, fueled by wide dissatisfaction with Trump.
• + AMZN: The e-commerce giant, which lost shoppers to rivals such as WMT and TGT during the pandemic—its share of US online spending fell to 34 percent from 42 percent—has resumed shipping of all items on its site after paring back to better handle essential items during the crisis, and hopes to regain lost ground.
• Summer internships, long a key resource for college students, have been upended by the pandemic, with a wide range of major companies canceling programs and rescinding offers because of the pandemic, though some are continuing to pay interns to work from home.
Sunday
• Front page story lists the names of the nearly 100,000 people who have died in the US so far because of the coronavirus, based on obituaries from newspapers around the country.
• Though Argentina has technically entered default for the ninth time in its history, the government is working toward a deal with creditors to restructure $66B in foreign debt, and announced that negotiations would continue until June 2.
• Trump’s advisers are growing concerned about Senator Kelly Loeffler’s campaign in Georgia, a newly competitive state where the president’s poll numbers show him losing ground to Joe Biden and where Loeffler faces nearly two dozen candidates, including two well-financed Democrats.
• America’s supremacy in logistics and supply chains “has been a calling card for decades,” mastered by companies such as UPS and WMT, but during the pandemic its cracks have become more obvious, and “the heart of the great American logistics machine is beating slowly and erratically.”
• Story says that warmer weather won’t be enough to kill the coronavirus, and that without social distancing and other interventions, summer will offer only a modest respite in some places—meaning quarantining and social distancing will need to remain in place.

WALL STREET JOURNAL
Weekend
• China has established itself as an increasingly assertive global player, but even as Beijing tightens its grip on Hong Kong and steps up its rhetoric against the US, senior leaders are acknowledging the severity of the country’s economic challenges.
• As America reopens for the summer, there is a growing divide between those celebrating the end of restrictions and those fearful of Covid-19’s re-emergence, and getting the country running again is turning out to be as difficult as shutting it down.
• Argentina defaulted on sovereign debt for the ninth time in its history, as it grapples with a new cycle of economic contraction, runaway inflation and a hard-currency squeeze exacerbated by the coronavirus pandemic.
• The Trump administration is reversing longstanding policies on children and families who come into the US illegally, citing laws and court rulings related to the coronavirus pandemic to support changes it has long sought.
• A Journal analysis found that Democratic presidential candidate Joe Biden has been unsuccessful at tapping into Bernie Sanders’ army of small donors, a key element of the party’s fundraising base for the upcoming election.
• A study of hospitalized patients with Covid-19 infections indicated that blood plasma transfusions from recovered patients improve survival rates, the largest research effort to date to shed light on the therapy’s efficacy.
• A son of slain Saudi journalist Jamal Khashoggi said his family had forgiven his father’s killers, sparing them execution in a case that ostracized Saudi Arabia’s crown prince from the West and imperiled his economic agenda.
• Companies from major retailers and package carriers to local restaurants and hair salons face higher costs to keep workers and customers safe and an indefinite period of suppressed demand, leaving them to navigate an ever-narrower path to profitability.
• While retailers and other business are struggling during the pandemic, Big Tech’s biggest advantage—proprietary business models which convert cash into innovation, market share, and an ever-larger lead over their competitors—is accelerating.
• H.O.T.S.: Designer fashion brands will face a wave of European store closures as they become more dependent on China for sales; The coronavirus may pose a bigger challenge to life insurers through markets rather than mortality; Off-price retailers such as TJX and ROST usually do well in economic downturns, but this one is different—and their shares may not be a bargain.

FINANCIAL TIMES
Weekend
• US secretary of state Mike Pompeo criticized China’s decision to impose national security law on Hong Kong, saying it would be the “death knell” for autonomy in the global financial hub.
• Australia gained an injection of A$60B to its budget after it emerged that a “reporting error” had almost doubled the estimated cost of its Covid-19 Jobkeeper scheme.
• The IMF reached an agreement with Ukraine for a $5B loan—in an 18-month standby arrangement—to shore up the country’s public finances, which have taken a hit because of the pandemic.
• Big Read piece says “Politicians are working on the assumption that there will be a Covid-19 vaccine in 12 to 18 months, but many of the scientists in the field are much less certain and some fear there might never be one.”
• Lex Column: If Burberry can build on its China sales, which are higher than the sector average, its turnaround will be delayed, not derailed; If employees move out of expensive cities to work at home, staff costs will fall further; Hong Kong stocks—including locally listed shares of BABA—are down, but the Chinese e-commerce giant has a number of factors working in its favor.
• Comment: Some investors fear Covid-19 may herald a Japanese-style future for the US and European economies, says John Plander—but the data point not to Japanification, but to a resumption of inflation.

NEW YORK POST
Saturday
• Despite the coronavirus pandemic, the combined fortunes of the country’s 600-plus billionaires—including Elon Musk, Mark Zuckerberg, Jeff Bezos, and Mike Bloomberg—saw a 15 percent increase between March 18 and May 19.
• The 2020 New York Auto Show, originally postponed until August from early April, has now been cancelled because of ongoing concerns about the coronavirus pandemic.
• White House economists say they believe the third quarter of 2020 will be the best in US history, with senior Trump advisor Kevin Hassett expecting US gross domestic product to spring back from a 40 percent drop in Q2.
Sunday
• New York state on Saturday reported its lowest one-day Covid-19 death toll in nearly two months, a sign it is making real progress in the battle against the disease, according to governor Andrew Cuomo.

FT : Aston Martin chief to leave as part of shake-up

Aston Martin chief to leave as part of shake-up
Mercedes executive set to take over, further solidifying the relationship between the two carmakers

Aston Martin’s chief executive Andy Palmer is leaving the business as part of a shake-up aimed at restoring the fortunes of the flagging carmaker, according to two people with knowledge of the move.

The luxury carmaker will name Tobias Moers, who runs the AMG performance arm of Mercedes-Benz, as his replacement in an announcement scheduled for Tuesday.

When contacted by the Financial Times on Sunday Mr Palmer said he had not been informed of the coming announcement and declined to comment further. Aston Martin declined to comment.

Mr Palmer, who joined Aston as its chief executive in 2014 from Nissan, oversaw a revival at the company that was close to bankruptcy.

But the group’s performance in the two years since its initial public offering in 2018 has been dismal. Shares have fallen by more than 90 per cent as the company was hit by oversupply to its dealerships, poor demand for its Vantage model, and a global slowdown among luxury buyers.

With costs rising as it embarked on opening a new factory in Wales to produce its DBX sport utility vehicle, Aston was forced to take out a series of expensive debt packages to keep the business afloat, weighing on the company finances.

The group booked a £120m loss in the first three months of this year, in part because of coronavirus closing factories and dealerships. Revenues fell by 60 per cent to £78.6m as car sales halved.

In January Lawrence Stroll, a Canadian billionaire with a background in motor racing and luxury fashion labels, led a £540m rescue deal to refinance Aston that saw him become executive chairman of the group.

Aston’s former chief financial officer Mark Wilson and its chairman Penny Hughes left in April. A further winnowing of the executive team is expected as Mr Stroll stamps his authority on the business.

Mr Stroll’s strategy for Aston includes delaying previous plans for electric cars and focusing on motor racing and the development of mid-engine supercars to rival Ferrari. His current Formula 1 team, Racing Point, will rebrand as Aston Martin Works for future seasons.

Bringing in Mr Moers as the company’s chief executive will also solidify Aston’s relationship with Mercedes, which already provides V8 engines and other technology for its cars and holds a small stake in the British business.

Running AMG, the highly profitable performance car unit of the German carmaker, has often been seen as a stepping stone to higher office within Mercedes’ parent group Daimler.

Ola Kallenius, Daimler’s chief executive, ran AMG between 2010 and 2013.

During his tenure Mr Palmer tried to diversify Aston’s line-up to widen its customer base, including launching its DBX sport utility vehicle due to come out this summer.

However in the eyes of critics the business also became distracted, stretching itself too far, such as by trying to use Aston Martin’s world-renowned brand on a range of eclectic projects from a speedboat to a Miami condominium block.

FT : VW ad agency investigates potential sabotage over racist advert

VW ad agency investigates potential sabotage over racist advert
Berlin-based Omnicom subsidiary facing questions over how ad was published

A Berlin-based agency owned by advertising giant Omnicom is investigating whether an act of deliberate sabotage led to the publication of a racist advert for a new Volkswagen Golf model.

The world’s largest carmaker apologised on Wednesday after the publication of a short Instagram video to promote the Golf 8 that featured an oversized white hand pushing round a smaller dark-skinned figure.

VW executives said they were “horrified” by the “racist advertising video” while Voltage, the agency that created it, said they had begun an internal investigation.

“If there is any evidence that an employee or supplier deliberately conceived and planted racist or bigoted messages within our communication, it will lead to an immediate dismissal and legal repercussions,” Toby Pschorr, Voltage’s chief executive said in a statement.

The company, a subsidiary of DDB that works exclusively for Volkswagen, would not comment further on the scope of the probe. DDB is part of the Omnicom Group.

However Mr Pschorr, who also sits on DDB’s executive board and has worked with VW for eight years, said approval processes at the company would be “scrutinised and re-evaluated to avoid something like this ever happening again”.

Last year, Volkswagen called the Voltage Golf 8 promotion its “most extensive campaign everʺ, with more than 450 online and offline images and clips. Voltage also created Volkswagen’s recruitment campaign, which included a “software is female” element to underline the company’s commitment to diversity.

The agency’s website appeared to be down over the weekend and the VW brand’s German language Twitter account was locked.

Volkswagen has also launched an internal investigation and has promised to make the results public. The group has one of the largest advertising budgets in the world, with the VW brand alone spending €1.5bn on marketing in 2019.

The now-deleted ad was part of a series set in Argentina about an interracial couple falling in love.

In another scene, the man approaches the car to find what appears to be a parking ticket on the dashboard, only to discover it is a love letter.

The white hand in the deleted advert belongs to the woman, who appears to be pushing her partner away from a yellow Golf 8 model. Placing a hand close to the camera so that it seems to be holding or controlling a figure further away is a common social media meme.

As the advert ends, the German words for “the new Golf” are faded in, in a way that appears to spell out a racist epithet for a split second.

Some social media users noted that the restaurant in Buenos Aires that the man is pushed into by the giant hand is called Petit Colon, which can be translated as “small coloniser” in German.

The restaurant is near the Teatro Colón opera house, which is named after Christopher Columbus.

>>> iPhone 12 and 5G — new report reveals best and worst carriers

iPhone 12 and 5G — new report reveals best and worst carriers
By Mark Spoonauer 2 days ago

A new OpenSignal report reveals that T-Mobile offers the broadest 5G availability, but Verizon delivers the fastest speeds

The iPhone 12 will be the first Apple smartphone with 5G connectivity built in when it launches this fall, so naturally prospective buyers want to know which carriers will offer the best 5G performance.

OpenSignal has just released a new report that measures the global 5G experience for ten mobile operators, and there’s good news and bad news.

The best 5G phones right now
iPhone 12: Release date, specs, price and leaks
On the plus side, every US carrier’s 5G network offers significantly faster performance than 4G. The bad news is that 5G speeds vary widely from one provider to the next — and so does the availability of 5G signals.

As you might expect, Verizon’s 5G network, which uses high-speed mmWave technology, turned in the highest average 5G download speeds. Verizon delivered 506.1 Mbps, which blows away Sprint (114.2 Mbps), AT&T (62.7 Mbps) and T-Mobile (just 47 Mbps).
That speed gap isn't a surprise. Verizon has pegged its initial 5G strategy on millimeter wave, which delivers much faster speeds than LTE. Other carriers are using low- to midband spectrum initially, which delivers a more modest increase.

But here’s the caveat. Based on OpenSignal’s findings, Verizon’s 5G availability was just 0.9 percent, compared to nearly 20% for T-Mobile. That’s because T-Mobile’s 5G network network, which uses the 600 MHz band, reaches much further than Verizon’s short-range mmWave network. T-Mobile launched its nationwide 5G network in December, and just announced further expansion of coverage into the Sa Francisco Bay Area, Sacramento, Calif., and Tampa and Orlando in Florida.

AT&T’s network, which operates on 850MHz spectrum, also offers relatively good 5G coverage compared to Verizon, with an availability rating of 9.7%. Sprint’s 5G availability was a little better at 10.3%; its network operates on the 2.5GHz band, which is also known as mid-band spectrum.

The good news for T-Mobile is that now that it has acquired Sprint it should be offer both better speeds and better coverage before long once it is able to combine networks. T-Mobile has already incorporated Sprint's 5G coverage into its own network in Philadelphia and New York City, so that its network in those two cities uses low band, mid-band and mmWave technology. That should mean faster speeds and wider availability, though we haven't been able to verify that yet, due to shelter-in-place constraints.


Verizon isn’t standing still either; the carrier says that it is doubling its mmWave coverage from 30 cities to 60 cities by the end of the year. It will also expend coverage in the 30 cities already launched, and Verizon says that it will offer mid-band 5G during the third quarter of this year. Plus, Verizon just turned on 5G upload speeds, which is about 30% faster than uploads over 4G LTE.

AT&T announced in April that its 5G network now covers more than 120 million people and 190 markets. It's on target to have a nationwide reach of its own by mid-year.

iPhone 12 and 5G
So which 5G network will be best suited for the iPhone 12? Rumor has is that the regular iPhone 12 and iPhone 12 Max will only support sub-6GHz networks, so right now AT&T, Sprint and T-Mobile would be the optimal carriers for those two devices.

The iPhone 12 Pro and iPhone 12 Pro Max are both expected to support mmWave and sub-6GHz, so they should fly on Verizon’s network. However, there is still a lot of time between now and October, when the iPhone 12 lineup will reportedly launch.

So the carriers will have to continually improve their 5G experiences to accommodate what the iPhone 12 and iPhone 12 Pro can deliver.

FT: Axel Springer among bidders for eBay’s classifieds business

Axel Springer among bidders for eBay’s classifieds business
The ecommerce group is embarking on one of the largest sale processes since coronavirus outbreak

Activist investors Starboard Value and Elliott Management have been pressing eBay for strategic changes to boost the stock price © Bloomberg



Kaye Wiggins, James Fontanella-Khan and Alex Barker MAY 22 2020Print this page6
Axel Springer, the German media group backed by private equity firm KKR, has submitted an initial bid for eBay’s classifieds business, according to people familiar with the matter, as the ecommerce group embarks on one of the biggest sale processes since the outbreak of the coronavirus pandemic.

The publisher of Die Welt and Bild and its US backer will face competition from groups including South African ecommerce group Naspers, the classified group Adevinta, which owns the Shpock platform, and a private equity consortium of Hellman & Friedman, Blackstone and Permira, the people said.

The process is still at an early stage, they added.

Ebay, which is under pressure from activist investors Starboard Value and Elliott Management and sold its StubHub business to Viagogo for $4bn last year, has been considering its options for several months. 

Before the pandemic began, analysts estimated that the classifieds business, which includes vehicle marketplaces in Denmark, Germany, Italy and the UK, and general classifieds platforms such as Gumtree, could fetch between $8bn and $12bn. 

However, it is not clear whether a deal could still go ahead at that price. Shares in rival classifieds businesses such as Auto Trader, Rightmove and Carsales.com have fallen since late February, with Rightmove shares down as much as 25 per cent since property viewings were put on hold in March.

The private equity firms, Axel Springer, eBay and Naspers all declined to comment. 

The sale will be the first test of dealmakers’ appetite for large-scale auction processes since the pandemic began, one person involved said. The crisis has made it harder to raise the debt financing needed for leveraged buyouts. “The key is, do you see banks willing to underwrite the risk?” the person said. 

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Axel Springer has been linked to a possible bid for eBay’s classifieds business since at least last summer, when it announced the take-private agreement with KKR. 

The German group already operates one of the world’s biggest portfolios of digital classified businesses, including the job portal StepStone and property sites such as Immonet. Springer executives have said KKR’s leverage will help the group further expand in the market through acquisitions.

Last year Hellman & Friedman bought the German classifieds group Scout24’s car trading business AutoScout24 in a €2.9bn deal. That came after Hellman & Friedman and Blackstone failed in a bid last May to buy the whole Scout24 business, which they listed in 2015.

FT : Small-time investing fuels real world consequences

Small-time investing fuels real world consequences
Non-professionals have increased oil market volatility, and suffered from it too

There are many differences between the Covid-19 and 2008 financial crises. But both illustrate the way market speculation can exacerbate dangerous price swings, particularly in tumultuous times.

A recent case in point: the plunge in US crude prices last month that resulted in part from a big sell-off of West Texas Intermediate futures contracts by the country’s largest oil fund, USO.

There have been many reasons for oil prices to crash, from the massive drop in demand due to the coronavirus lockdown to the petro-politics of Russia and Saudi Arabia. But another reason was the level of speculation in oil markets.

The CME Group, a derivatives exchange, “became concerned” about the fact that USO, an exchange traded fund that deals in oil futures, had amassed a quarter of the WTI futures contract due to be delivered in June. The CME felt this was a dangerously large position, and ordered USO to scale back. At this point, furious trading ensued and June futures prices plunged.

This reminds me very much of the way in which oil prices spiked to almost $150 a barrel in 2008, even as a giant recession was taking hold.

Then, as now, there were some real supply-and-demand dynamics at work. But increased use of commodities as a financial instrument also played a role. This was brought home by hedge fund portfolio manager Michael Masters, co-founder of the non-profit financial reform advocate Better Markets, in striking Senate testimony on the topic in May 2008.

“What we are experiencing is a demand shock coming from a new category of participant in the commodities futures markets . . . corporate and government pension funds, sovereign wealth funds, university endowments, and other institutional investors,” he said, noting that such investors now hold the largest share of outstanding commodities futures contracts.

The “financialisation” of commodities, which academic research shows has distorted markets, isn’t coming just from institutions. The rise of ETFs like USO mean that plenty of retail investors are dabbling in oil derivatives too, a trend that The Oxford Institute for Energy Studies has linked to the recent collapse of WTI prices.

Even with coronavirus-related demand destruction and the saturation of global storage capacity, writes Oxford Energy author Ilia Bouchouev, “it is very unlikely that any of us could have foreseen WTI ever trading at negative $40, and the critical role that retail-oriented derivatives products played in such a historic event”.

It’s hard to understand why anyone would have wanted to be in USO, given that it had a negative 94 per cent return from its start in 2006 through to mid-April. But as the Oxford white paper notes, oil ETFs have attracted large inflows from retail investors in recent months despite such huge losses.

According to Robintrack.net, which follows the number of users holding each asset on the online trading platform Robinhood, there were a record 220,905 user accounts holding the USO fund at the end of April, almost 30 times more than two months earlier.

All this is part of a long-term trend towards retail investors using low-cost vehicles like ETFs to take part in a specific investing trend that was hitherto only available to professionals — for example, using oil as a financial asset class to hedge against inflation and geopolitical events.

In some ways, ETFs are just the latest iteration of a trend that began with index funds, and has extended to low cost brokerages, e-trading platforms, and even fintech robo-advising.

That’s not a bad thing, per se. In fact, you could argue that it’s only fair for the little guy to be able to get the same upside as market professionals. But of course, that means they get the downside, too. New technology platforms such as Robinhood (which added 3m users in 2020, half of them first-time investors) allow novices to make such bets in the blink of an eye.

“I’d wager that 90 per cent of investors in USO couldn’t explain what contango is,” says Mr Masters, referring to the difference between spot and futures prices that traders must try to navigate.

Now that oil ETFs have imploded and USO’s own broker, RBC, has refused to place more orders, some are undoubtedly figuring it out. That’s wise, especially given that a new rule proposed by the Commodity Futures Trading Commission could lift the Dodd-Frank position limits put in place after the post-2008 oil spike.

That may create more liquidity in the market at a time when it’s arguably needed. But it could also pour kerosene on the next bout of market volatility.

That could come from more sudden price drops, if the reopening of the US economy doesn’t go well. Or it could mean a sudden spike of inflation if strong demand coincides with record monetary easing and asset purchases by the US Federal Reserve.

The CFTC itself has issued a warning about the risks of investment products linked to commodity futures. Dan Berkovitz, one of the CFTC commissioners who smartly voted against the loosening of position limits, has summed up the situation.

“When the oil market gets volatile, whether its trending up as we did in 2008 or trending down now, we see an increase in interest in these funds exacerbating the trends that we’re in and even affecting the physical markets,” he has said.

Then, as now, treating fuel as a Wall Street instrument has real world consequences as well.