He could shift markets with only a few words, he was the architect of propelling Saudi Arabia to become the dominant force in the oil world, and he was even briefly taken hostage at an OPEC meeting in 1975 by the infamous Venezuelan terrorist Carlos the Jackal. Many in the western world also felt they were being taken as a hostage, to OPEC’s ability to control supply, forcing prices higher and higher. Sheikh Ahmed Zaki Yamani died in London earlier this week aged 90.
In years gone-by the U.S. winter would normally have run out of steam by mid-January, or maybe I should say snow, driving cold weather over the Atlantic to Europe for a few pre-spring surprises, and of course a potential jump in LPG prices. So not only are we past mid-February, but even the southern state of Texas ended-up getting a burst of the current U.S. cold snap, engulfed by a huge snowstorm, and below zero temperatures, that started last weekend. The infrastructure buckled, power was lost, water was cut-off, people were put at serious risk.
As the people of China celebrate Chinese New Year this weekend, and where the common greeting literally translates to “wishing you enlarge your wealth”, the world will be looking in eager expectation at China’s economy, wondering if its 2021 performance will be as strong as an “ox”, and how that will also impact the LPG market, as well as the patterns of trade associated with the world’s biggest LPG importer.
It felt that with every step forward we were able to make last year, there were two firmly moving us the other way, but now I’m starting to feel a little more confident we’re actually making some progress. Of course the vaccination programme is our beacon of hope, while face masks, social distancing and hand-washing, mixed-in with degrees of lockdown, have been mere obstructions to the virus.
It could only be three weeks ago to the day that I just happened to be talking to a very knowledgeable personality in our business, I jested with him that in my view the VLGC freight market had become “crazy” with a capital “C”, and surely it was time for a significant correction. He’d heard Pertamina were short of a ship to load out of the U.S. Gulf on prompt dates, and the vultures were circling their prey. We even shared a smile that the rate might even end up above $200/ Mt.
A momentous week without doubt, not just in and around the Capitol building, but beyond and across a very tired and anxious world. There was still talk globally of polar vortexes, while US politics suddenly became that of polar opposites. The COVID pendulum swung again, as the roll-out of vaccines became a concern, while the number of cases, and especially deaths, darkened the light of hope at the end of the tunnel, seemingly pushing it further into 2021.
As 2020 was the year totally dominated by coronavirus, COVID-19, whatever name you choose to call it, 2021 will surely be liberated by the “vaccines”. Yet confinement, lockdown, stay-at-home orders, that are so prevalent today in many industrialized countries of the world, are the response to what is clearly the most serious phase of this pandemic. It’s visibly showing that we believe positive change is on its way, and our ability economically to ride the current storm is proving to be far better than April’s 20% collapse in global economic output.
Do you get that feeling when the world is starting to head in a certain direction, some thing or somebody, comes in and screws it all up? Whatever our political inclinations may be, we started to believe there would be some kind of peaceful handover of the Presidential baton in the most powerful and richest democracy in the world. How wrong we were! We all felt the light at the end of the coronavirus tunnel was getting nearer, as vaccines galore were being approved, only for people in the know to start questioning how quickly those shots in our upper arms could actually be administered.
I normally try not to say “bang” and “LPG” in the same sentence, I think it is asking for trouble, but I have to admit the numbers are suggesting it’s exactly what we are seeing as 2021 begins. Despite the news of the quickly spreading COVID variant forcing more lockdowns, the disappointing inoculation rates coming out of the U.S., where only 1 million people were vaccinated in the first week despite an initial monthly target of 20 million, and demand forecasts for oil, as well as most things, slipping further along the timeline, the LPG world in contrast is on a bit of a roll!
Wherever you’re living in the world, we only have a few days left before the end of a bewildering year. I’ve just got through Christmas, I admit with a hangover, but this time it’s more my stomach’s position in relation to my trouser belt that’s agitating me a little. We’re now on that very British day; Boxing Day, which I won’t try and explain the meaning of, but it’s not as straight forward as you might think, and then it’s that weird week leading up to the New Year.