Newsletter Archive


OPEC meeting on Friday this week is fateful for Norway and other petroleum exporting nations. We lean towards that the Sunni-Shia conflict has damaged the cooperation climate so severely that the cartel in practice is dead.

It is not easy to cooperate in one area while attempting to kill each another. In Iraq, Syria and Yemen Sunni and Shiite Muslims are fighting against each other with brutality that is second to none.

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If growth in the US economy picks up, it can lead to a summer party on the stock exchange. Conversely, a Greek bankruptcy could trigger a correction.

According to the Greek Prime Minister, Greece is close to a deal with its creditors. However, he has been saying this for months.

According to reports from the opposite side of the negotiating table there has been little tangible progress except for an improved weather.

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Judging by last week's interview with a Saudi Arabian official, a change of course is unlikely at the OPEC meeting in three weeks.

Last week Saudi Arabia gave a rarely candid interview to the Financial Times. This stipulates that the strategy to squeeze the high cost producers is working. Investments in shale oil, tar sands and deep-water oil are plunging.

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Spring has brought dramatic trend changes in the financial markets. Government bond yields are rising sharply, while the stock exchanges are trembling. Furthermore, oil prices are up nearly fifty percent since the January bottom.

The German ten-year government bond yields have increased tenfold from 0.06 to 0.59 percent in three weeks. The Japanese and US bond market is also characterized by significant selling pressure.

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The Greek debt drama is now entering a critical phase. Without an immediate breakthrough in debt negotiations the country can go bankrupt as soon as Tuesday May 12th.

Greece announced major changes to its negotiating team a week ago. This together with optimistic statements made by the Prime Minister caused the government bond yields plunge.

An agreement with creditors is still a long way away off and we believe it will be extremely difficult to reach.

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