Mark 🇦🇺

Aussie equities looking for stagflation...

If dramatically more Middle East energy production infrastructure get's destroyed, one wonders how supply arrangements will evolve. Would it be purely about top dollar or would it come down to alliances. If you are my friend you get what you need, if you are not....

*** HELP WANTED *** Does anyone know of a free daily data source for either the Oman or Dubai benchmarks?

Port Stanvac closed 2009 under Rudd. Clyde closed 2012 under Gillard. That's two when Labor was in power. All were commercial decisions by oil companies regardless of who was in government. All were allowed by both sides of politics. The strategic importance of supply chain security was realised with COVID. The Fuel Security Act was enacted to address these concerns.

@Mark_Graph Nope all closed by the LNP. Looking after it up

Australia has gone from importing crude to refine domestically, to just importing the finished fuel directly. We are almost entirely supply-chain dependent on Asian refineries now. 1/2 🧵 #auspol #ausbiz #ausecon

@Margare12740329 Port Stanvac (SA) closed when Rudd was PM and Clyde (Sydney) closed when Gillard was PM. However, none of the six recent closures were government decisions. All were commercial decisions by multinational oil companies based on profitability compared to larger Asian refineries.

@Mark_Graph Nope it was the LNP.

@verticalc @Margare12740329 ❓

@Mark_Graph @Margare12740329 And people think they suddenly make sense now?

The betting market sees the Farrer by-election as primarily a One Nation v Independent contest. The Coalition are in 3rd and 4th place. #auspol #ausbiz #ausecon

The $70 WTI/Oman price gap won't close quickly – arbitrage requires some certainty before rerouting supply chains and reconfiguring refineries for different crude grades. Nobody makes that investment if Hormuz might reopen next month. You'd need 3-6 months of sustained closure before structural shifts begin.

@AustRepublican Fair point. Australia buys primarily from Asian refineries (South Korea, Singapore, Japan), so Oman/Dubai are the relevant benchmarks for the price of oil in Australia – at $167 and $136. So the situation is indeed worse than the Brent (European) or WTI (US) benchmarks suggest.

@dgcpol I have no evidence, but my guess is political pressure. The government needed a Budget narrative that was good for attacking inflation and spending more money. Iran now gives them cover to line up with external macroeconomic analysis without losing face.

@Mark_Graph Hi mate. Any thoughts on why Treasury was out of step like that?

In saying productivity is down, Chalmers just revised down Australia's economic speed limit. Treasury was the outlier at 2.5% potential. The RBA is at 2.0%. Most economists: 2.0-2.2%. While the war in Iran gets blamed, the productivity slump is the real driver of persistent inflation. afr.com/policy/economy… #ausbiz #ausecon #auspol

Blaming LNP alone for refinery closures is lazy and factually wrong. Closures spanned Labor & LNP govts – driven by economics: ageing plants couldn't compete with larger Asian refineries. Multinationals (Caltex, BP, ExxonMobil, Shell) made commercial calls. And it was the Coalition that introduced the Fuel Security Act in 2021. Both parties ignored warnings for 20 years.

@Mark_Graph Thanks to the LNP 6 of the 8 refineries where all closed during their 9 years of hopeless government.

And what does a revised-down speed limit mean for RBA policy rates? Lower potential growth means the neutral rate is higher for longer. The forward curve already reflects that world. Yesterday Chalmers just confirmed it officially. #auspol #ausbiz #ausecon

@AvidCommentator Thanks

@Mark_Graph I believe it's in the same spreadsheet for memory.

Australia is in deep deep trouble with its fuel supplies. Not that low stock levels is anything new.

@AvidCommentator Does DCCEEW have data on the crude oil holdings?

Its a matter of perspective. Its fair in that represents the actual stock of finished product in Australia over time. Its less fair in the sense that previously we had refineries producing up to 78% of our required fuels during the era covered by this chart. And naturally the oil held for that fuel to be produced doesn't count.

@AvidCommentator @Peter_Strachan But housing is a supply problem

"He (Albanese) then said shortages were a "demand issue not a supply issue". Now apply that to housing, clown... skynews.com.au/australia-news…

Today's ABS jobs report - mixed signals - continued strong emp # growth, UE rate 4.3% - up on the back of strong m/m growth in the participation rate. Hours worked still trending up even if the SA monthly is down. #auspol #ausbiz #ausecon