background

Increasing demand worldwide Oil price close to $ 100?

Status: 23.06.2021 3:10 p.m.

Oil is more expensive than it has been in two years. Experts warn of a supply crisis: The prices for crude oil and thus also gasoline, kerosene and heating oil could soon rise much higher.

From Angela Göpfert, tagesschau.de

Oil prices hit new multi-year highs this week. For the first time in two years, a barrel (159 liters) of the North Sea Brent cost more than $ 75 again. For a barrel of the US West Texas Intermediate (WTI) variety, more than 73 dollars were paid on the market – the highest amount since October 2018. Rising oil prices – something that businesses and consumers may need to get used to. According to some experts, the new multi-year highs in oil prices, which many consumers are already feeling painfully at gas stations or when buying heating oil, are just the beginning of a longer upward trend in the oil market.

Analysts predict rising oil prices

The experts at the US investment bank Goldman Sachs expect the Brent price to rise to $ 80 this summer. But that is not the end of the story. An oil price of $ 100 is a “real possibility”. Alex Sanna, top oil trader at Glencore, the world’s largest commodity trading group, also said, according to the Financial Times, that an oil price of $ 100 is becoming increasingly likely.

The experts at JPMorgan even see a new oil super cycle looming and recently renewed their forecast of an oil price of $ 190 in 2025.

Demand congestion as a price driver

Francisco Blanch, raw materials expert at Bank of America, may not look quite that far into the future. For this he has the most precise 100-dollar forecast ready: the oil price could crack the round mark as early as 2022. The market hardly changes on the supply side – and this in turn is offset by an immense backlog of demand. It is easy to explain where this backlog of demand comes from: Just as many private households restricted their consumption during the pandemic, so too many companies put the necessary investments aside. Now that the global vaccination campaign is gaining momentum, at least in the major industrialized countries, consumers, companies and economies have a lot to catch up on.

Delta variant is a risk factor

The more relaxed Corona situation and the awakening global economy are leading to higher demand for crude oil, gasoline, diesel – and kerosene. Oil expert Blanch sees the rising travel industry as a major price driver.

The delta variant of the virus from India, which could lead to a further tightening of the corona measures, is currently also posing a risk to the economy.

Signal of a shortage of supply

In search of signs of whether demand is actually exceeding supply at the moment, it is worth taking a look at the market for so-called oil futures. Current oil futures contracts are quoted there higher than contracts with delivery at a later point in time. Such a constellation, referred to by experts as “backwardation”, is rather unusual and a clear indication of fear of scarcity – “and thus for further rising prices”, as market expert Robert Rethfeld from Wellenreiter-Invest emphasizes.

A price corrective called fracking

The rising prices should actually make re-entry into the oil market attractive for the US shale industry. In the past, the US frackers acted as flexible price correctors on the oil market: If prices rose, more shale oil was drilled in the short term, supply increased, prices fell again.

As a reminder, the last time oil traded above $ 100 was in 2014, when a rapidly growing supply from the US fracking industry brought an abrupt end to the last oil super cycle.

Sustainability trend slows US oil industry

But this mechanism doesn’t seem to work that well anymore. This is due on the one hand to the new US President Joe Biden, who imposed a stop on oil and gas drilling on state-owned land in January, and on the other hand to the global trend towards sustainable investment.

“The number of active US oil wells is increasing only slowly,” emphasizes wave rider expert Rethfeld. “The investors do not want to see an expansion of the production capacities at the moment, but instead demand investments in renewable energies.”

Iran as a risk factor

The production countries of the OPEC + oil cartel, especially Saudi Arabia and Russia, could benefit from the West’s climate policy. It remains to be seen how willing they are to expand production to fill the void left by the US oil industry.

Especially since there are supply risks on the part of OPEC: “After the election of an ultra-conservative cleric as the new president, Iran will have a hard time overturning US sanctions and increasing oil exports,” said Eugen Weinberg, raw materials expert at Commerzbank .

Inflation Risks Before Revaluation?

Should the oil price actually rise further towards 100 dollars, this would inevitably lead to a reassessment of the inflation risks in the financial markets, since the oil price is one of the main drivers of consumer prices.

Just yesterday, Jerome Powell, head of the US Federal Reserve (Fed), told the House of Representatives budget committee again that the Fed was considering the current high inflation rates a temporary phenomenon considered. However, market expert Rethfeld emphasizes: “Any oil price above $ 100 would suggest to the public that Powell is wrong.”

CureVac vaccine not very effective Crash of a Bearer of hope

Status: 06/17/2021 12:31 p.m.

CureVac’s vaccine proves far less effective than hoped, with the biotech company’s stock plummeting. What does this mean for the vaccination campaign and German taxpayers?

From Angela Göpfert, tagesschau.de

For the company CureVac and its owners, dramatic scenes have taken place in the past few hours. The price of the Tübingen-based company listed on the US technology exchange Nasdaq had already halved in after-hours trading on the US stock exchange on Wednesday. This morning, the CureVac share then rushed in German retail by up to 52.4 percent.

Eight billion euros destroyed on the stock exchange

This destroyed around eight billion euros in market value within a few minutes. This melted down from over 15 to a good seven billion euros. The drastic course reaction shows how surprisingly, despite all previous doubts, such devastating study data as CureVac has now presented, came in the end – and how serious the consequences could be.

On Wednesday night, CureVac announced that its first-generation vaccine candidate was CVnCoV only an effectiveness of 47 percent against a Covid 19 disease of any severity. The company thus missed the intended statistical success criteria for approval.

Completely out of the vaccination campaign?

The study is to be continued, and the degree of effectiveness could change with higher case numbers. However, if the current trend continues, approval is unlikely. In this case, experts say CVnCoV would be a total flop for the company. For the German vaccination campaign, CureVac is therefore canceled until further notice. “According to these study results, it will be extremely difficult for CureVac to play a role at all in the current vaccination campaign”, told LBBW analyst Timo Kürschner tagesschau.de . According to the federal government, the setback for the Tübingen company does not upset the vaccinations in Germany. “This announcement has no effect on the speed of our vaccination campaign”said a spokesman for the federal health ministry.

Other manufacturers are still catching up

Industry observers believe that speed is just as important in vaccine development as it is in drug development. “Late bloomers like CureVac only have a chance if they have a better effect profile or fewer side effects”, explains pharmaceutical expert Kürschner.

“The more time that elapses, the more efficient the production of vaccines that have already been approved will be”says the pharmaceutical expert. “BioNTech & Co. are then more and more able to serve the required delivery quantities.” His conclusion: “We could get to a point where you actually no longer need the CureVac vaccine because the vaccination campaign is already so advanced.”

Hundreds of millions from the federal government

The severe setback for CureVac meanwhile has effects beyond the current vaccination campaign. It meets the German taxpayers – after all, the federal government has a stake of around 16 percent in the company and has supported vaccine development with a special program worth several hundred million euros. It is also a debacle for SAP co-founder Dietmar Hopp, who holds almost 50 percent of the shares.

Last but not least, the CureVac price disaster hits the countless private investors who have invested their money in the share. The paper of the company, which is legally based in the Netherlands, has been one of the most traded foreign stocks in the past few weeks on the Stuttgart Stock Exchange, where many private investors cavort.

Recently increased warning signs

Recently, there had been more and more indications that the CureVac vaccine could fail for the time being. Even when Health Minister Jens Spahn, according to media reports, deleted CureVac from the federal government’s planning for the current vaccination campaign, this could hardly affect the share.

The high market capitalization compared to rival companies was also a warning sign: Before the current price crash, CureVac had a higher market value than Novavax. The US manufacturer had already reported a Phase III study on Monday, according to which its vaccine had a has a high effectiveness of 90 percent .

Often high risk in the industry

For CureVac and its owners this is now the “Worst case” of a biotech company. At the same time, the CureVac case also shows the general risks facing the industry. Companies in this industry usually have very few active ingredients in their pipeline. If one then fails – for whatever reason – it often has fatal consequences for the entire company.

LBBW expert Kürschner also sees CureVac “a prime example of the risks involved in investing in biotech companies”. However, Kürschner does not fear negative consequences of the CureVac events for the German biotech industry. After all, there is a positive counterexample in the country. “I’m sure: BioNTech’s success story will outshine the rather negative course at CureVac.”

Missing computer chips Short-time work at VW and Daimler

Status: 16.06.2021 10:23 a.m.

Time and again, the production lines in car plants stand still – the manufacturers refer to the industry-wide shortage of chips. Now it hits Volkswagen and Daimler again. When will the situation improve? From Angela Göpfert, tagesschau.de There will be stoppages in the coming week at the VW main plant. In the Tiguan, Touran and Tarraco production as well as in the Golf production in the late and night shifts, the Wolfsburg switch to short-time work. In the Daimler plants in Bremen and Rastatt, short-time work is already the order of the day. The reason is once again the industry-wide shortage of chips.

06/08/2021

Interruptions cost billions

It is nowhere near the first time that the shortage of semiconductors has slowed automakers’ production. It was not until the end of May that the VW luxury subsidiary Audi at the Ingolstadt and Neckarsulm locations suffered production interruptions. BMW had been hit a few weeks earlier. The Ford plant in Cologne is also affected. The German auto industry is not alone with its problems: The US auto giant Ford calculates charges of around 2.5 billion dollars this year due to the lack of chips. The problems in the automotive industry have consequences for the entire economy. Just today, the researchers at the Munich Ifo Institute lowered their forecast for the growth of the German gross domestic product this year from 3.7 to 3.3 percent. To justify this, they also referred to bottlenecks in the delivery of intermediate products such as semiconductors.

Improvement in the third quarter?

It could take a few more weeks for a change for the better. According to experts, the automotive industry is heading for the lowest point. “We are facing the toughest six weeks,” said Murat Aksel, VW Board Member for Purchasing, recently in an interview with the “Handelsblatt”. The situation should improve again in the third quarter. Competitor Daimler also expects an improvement in the second half of the year. The Boston Consulting Group (BCG) also estimates that the situation should ease from July.

Around four million cars less

Because of the lack of chips, automakers worldwide produced 1.4 million fewer cars in the first quarter and 1.6 million in the second quarter, the BCG experts calculate. For the entire year 2021, the failures are likely to amount to four to six million vehicles.

05/04/2021

The consulting firm Alix Partners in Munich estimates 3.9 million cars. This corresponds to a value of non-produced cars of around 91 billion euros.

Lessons from the shortage of chips

The car manufacturers have long since learned their lessons from the shortage of chips: They are carefully reviewing their supply chains and are not only expanding their warehousing for chips. After all, the supply chains have thinned out after a pandemic for more than a year, even for important intermediate products, for example in the chemical industry.

06/07/2021

Security of supply is suddenly a priority again after years of just-in-time delivery. Chip manufacturers are also taking strong countermeasures and are pushing ahead with expanding their capacities at full speed. In Germany, the new high-tech chip factory from Bosch ensure regional supplies.

Misjudgments as the cause

But how did it come to that? Where does this lack of chips come from, which is currently keeping the auto industry and its employees in suspense? With the outbreak of the corona pandemic, demand for cars collapsed and chip manufacturers cut their production plans.

05/31/2021

When the demand for new vehicles suddenly increased surprisingly in the summer of 2020, chip manufacturers such as Infineon or NXP were overwhelmed by the demand. The current chip shortage is therefore based on a whole series of misjudgments – on the part of car manufacturers and suppliers, but also on the part of chip manufacturers. The lack of chips also shows that the auto industry did not come through the Corona crisis as badly as feared.

Price capers of the Windeln.de share The dangerous game of gamblers

Status: 10.06.2021 6:24 p.m.

Small investors let shares of the baby outfitter Windeln.de shoot up first – then they crash. This risky game is powered by social media. Newcomers in particular make a lot of mistakes. From Angela Göpfert, tagesschau.de From the so-called penny stock to the investor’s favorite: The story of Windeln.de reads so seductively simple at first glance. Within a few days, the paper soared from around 70 cents to 6.92 euros – a staggering price increase of almost 900 percent. The share of the online baby outfitter was not driven by new, positive news about the development of the company, but by a host of gamblers who drum for the company in investor forums such as Reddit and on social media.

Report of loss in April

They drummed for a company that made a net loss of 13.7 million euros in 2020 and officially announced in April that it had suffered a loss of more than half of its share capital. In other words: Windeln.de obviously needs fresh money. The notification of loss was by no means voluntary. Rather, Windeln.de thus complied with an obligation imposed by the legislator: Companies must inform if losses have exceeded a critical limit and there is an urgent need for action.

“Flagpole” as a warning signal

The course of the Windeln.de share seems all the more absurd. Experts speak of such a steep, almost vertical rise in price “Flagpole”. Many stock market beginners are attracted and seduced by such price patterns. One would have loved to have this share, since it would have enabled one to multiply one’s capital in a very short time.

The so-called “Flagpole” is clearly visible in the Windeln.de chart. Image: tagesschau.de For technical analysts, i.e. stock market experts who analyze price developments and other market data, this is the “Flagpole” but one thing above all: symbol of an exaggeration phase on the stock markets – and thus a clear warning signal. The Federal Association of Consumer Organizations (VZBV) is also critical of the current price developments at Windeln.de, Nanogate, Clover Health, Gamestop and other stocks with particularly noticeable highs: “This has nothing to do with investing, it is pure speculation”, said Christian Ahlers, speaker in the financial market team tagesschau.de .

A “Fireworks” of investor errors

At Mojmir Hlinka from the Swiss asset manager AGFIF International, the alarm bells are ringing when stocks like Gamestop or Windeln.de are mentioned: “These are pure speculative objects, without any substance.” The Swiss expert makes a whole in this context “Fireworks” on the basis of typical investor errors, especially the neglect of the likelihood that certain events can occur. Experts speak of “neglect of probability”. “The tiny probability of making a profit on such stocks is massively overestimated by investors. In contrast, the great probability of a loss is clearly undervalued”, told Hlinka tagesschau.de .

When emotions are involved

Hlinka’s perspective on the markets is a special one, as he operates asset management on the basis of the so-called “Behavioral Finance”. This economic research direction is based on the findings of the psychologists Daniel Kahnemann and Amos Tversky. Accordingly, the investor does not act rationally, but is controlled by his emotions and typical behavioral patterns. As a result, he makes mistakes that reduce his profits. Such a typical mistake has a lot to do with paying attention to certain papers. “These stocks are widely reported in the media, especially on social media”, emphasizes AGFIF expert Hlinka. “This means that more information is available to them more easily. That automatically makes them more interesting for investors.”

Social media fuel herd instinct

Another problem for the normal investor is the herd instinct: Many people like to do what the masses do. “This phenomenon can be observed in any stock market hype. People feel safer in the herd”, emphasizes Hlinka. “Investors’ herd instinct is currently controlled primarily via social media. Quasi real sects are forming in the investor forums.” Consumer advice center expert Ahlers is similarly critical and warns: “Tip givers and sellers can also be found in social networks, who may do more than exchange investor experiences and may also advertise dubious investments.”

Financial regulators advise caution

The German financial supervisory authority BaFin has now recognized this: “BaFin advises all investors to check the information provided on social media very carefully with the help of other sources”According to the agency’s website. “Chat groups in social networks are often only used to entice investors to buy certain stocks so that the senders can benefit from the rising prices of these stocks.” As new as the influence of social media on share prices may be, the mechanisms behind the current excitement about papers like Windeln.de have been well known for centuries. The first big hot topic in financial history was tulip bulbs. Numerous other bubbles followed – from railways, the South Seas, the Internet industry to US real estate, to name a few. “Each of these bubbles has burst so far”, says Hlinka. “History has proven that. At some point this hype will also burst.”

Massive price drops

Perhaps the bursting of the bubble has already begun with a look at some of the shares: Today the Windeln.de share rushes down by up to 35 percent. Clover Health stocks fell 24 percent on the Nasdaq yesterday. When exactly a bubble will burst is difficult or even impossible to predict, even for experts. But the stock exchange world has also found a technical term for this: the “Greater Fool Hypothesis”, according to which prices will continue to rise as long as there is one in the market “even bigger fools” there who pays even more.

Rising producer prices “Hidden inflation” as a warning sign

As of: 06/09/2021 1:32 p.m.

In China, producer prices have risen faster than they have been in 13 years. In Germany, too, inflationary pressure from producers is growing. When will consumers feel this? From Angela Göpfert, tagesschau.de In China, producer prices rose by 9.0 percent in May, the strongest they have been since 2008. Anyone who thinks what is happening in China does not affect the German consumer is wrong. As far away as China may feel for some German consumers: The fresh data from China are fueling the inflation debate in this country, as they reveal a problem that Germany and the euro zone are also facing.

“Hidden inflation” also in Germany

In April, producer prices in the Federal Republic of Germany soared by 5.2 percent compared to the same month last year. That was the highest increase since August 2011, when prices rose sharply after the financial and economic crisis. The producer prices are considered to be an important leading indicator for the development of consumer prices. They usually only meet with far less media interest, which is why they are sometimes referred to as “hidden inflation”.

Energy prices as a driver of inflation

So the crucial question is: Will producer price inflation also reach consumers? So far, not much of that has been felt. In April consumer prices in Germany climbed by 2.0 percent compared to the same month last year. Around half of this increase was due to the rise in energy prices. A look at the recent past of the German economy also shows that consumer prices have mostly only increased significantly at a much slower pace when producer prices have risen similarly. The producer price inflation was therefore only to a small extent reflected in rising consumer prices.

Consumers have saved a lot of money

But this time everything could be different. The reason is a special effect of the corona pandemic, which has never come to fruition in this pronounced form: the deferred demand. “The corona pandemic inhibited private demand for months and led to a kind of compulsory saving. The savings surplus now amounts to over 150 billion euros and is likely to rise to around 200 billion euros by the end of 2021,” said LBBW economist Jens-Oliver Niklasch across from tagesschau.de . This corresponds to a potential increase in consumer demand of up to 17 percent compared to the pre-Corona year 2019.

Companies can pass on more costs

“If we open everything now, then this strong additional demand will meet an offer that has become more expensive in terms of costs. The probability is correspondingly high that the companies will be able to pass on a larger part of the costs,” says Niklasch. Michael Holstein, chief economist at DZ Bank, is convinced that “the manufacturing companies will certainly try to pass on part of their cost increase to their customers.”

Savers are actually expropriated

Against this background, LBBW economist Niklasch initially expects inflation rates to continue to rise over the remainder of the year. In the second half of the year, the VAT effect should come into its own: “Then we will probably reach inflation figures of over three percent.” This has very real consequences for consumers and savers in Germany: With interest rates of zero percent and an inflation rate of over two or even three percent, the real interest rates, i.e. the nominal interest rates minus the inflation rate, are negative. Savers who invest their money in overnight money accounts or savings books are actually expropriated. This is fueling the flight into stocks and real estate, which in turn continues to inflate the price bubbles in these markets.

Wage-price spiral not yet in sight

After all: LBBW expert Niklasch sees the rising inflation rates as a temporary phenomenon, the ingredients for a permanent increase are not there. “For inflation rates to rise over the long term, wages would have to go along with them; a wage-price spiral like the one in the 1970s would be needed. But we are not seeing that in Germany at the moment.” From January 2022, the inflation rate should quickly drop below the two percent mark.

Stress on industry harms the economy

But even if the rising producer prices were not or only slightly reflected in rising consumer prices, that would not bode well. If producers cannot pass the rising prices on to consumers, that would indicate weak consumption dynamics. That seems to be the case in China at the moment, as Commerzbank foreign exchange expert Hao Zhou points out. “As a result, there is a risk that industrial profits will shrink rapidly, which will weigh on the general economic outlook.” So regardless of whether the producers pass the rising producer prices on to the consumers or not: they are always a warning signal.