Beggar-thy-neighbor policies

Key words: Imports distribution, International trade policies, Currency war, Dollar standard, Exchange rates  The beggar-thy-neighbor term describes economic policies that aim to enrich one country at the expense of other countries. Conventionally, the term is used in relation to such international trade policies as the application of import quotas and tariffs, regulation of corporation tax…

Calculating Enterprise Value

Key words: Core business operations, Operational items, Long-term funding sources Enterprise Value represents the value of the company’s Operating assets but there are many confusions when thinking about what to include. Take Shareholders Equity, add Debt and substract Non-operating assets. But what is the point of adding and substracting different items? The Enterprise Value calculation…

Aviation fuel

Key words: Jet fuel, aircraft fuel, Jet A and Jet A-1, Jet B, JP (Jet Propellant), Avgas, Military jet fuels The aviation industry is a major consumer of jet fuel, a product of the family of middle distillates. Fuel accounts for more than 35% of an airline’s operating costs, and is the number one expense…

Oil product inter dependency

Key words: NWE (North-West Europe), ARA (Antwerp – Rotterdam – Amsterdam), MED (Mediterranean), US Gulf Coast oil hub, Inco terms, FOB, CIF, Cargoes, Barges Volatilities and price trends of crude oil and refined products have a strong price relation. The reason is that the price of crude oil is the same for all refined products…

Inktomi: Read before you buy

Key words: Leading Internet search provider, One of the stellar initial public offerings of 1998 Initially priced as low as $12 per share, the stock went public on June 10, 1998 at $18 and doubled its first day. The company raised an estimated $36 million on the sale of two million shares. In August 1999,…

Deutsche Bank or financial health of European banks?

Key words: CDS prices, Major banks, Derivative exposure, Deutsche Bank and its peers What do we say about the Deutsche Bank financial stability? As of February 8, 2016, the bank published information related to its payment capacity in the 2016-2017. As it appears, there is sufficient funds to pay Additional Tier 1 coupons of approximately…

The US national debt

Key words: Federal, State and Local debt, Debt-to-GDP ratio, Debt-to-tax ratio The amount of the gross outstanding federal debt issued by the United States Department of the Treasury (since 1790) has surpassed $19 trillion for the first time in history according to usdebtclock.org. Other sources show it is almost $19 trillion. The US national debt,…

PADD regions

Key words: PADD 1, PADD 2, PADD 3, PADD 4, PADD 5, ACDU capacity, operable refineries During World War II, the Petroleum Administration for War used five districts to help allocate fuels derived from petroleum products. Although the Administration was abolished after the war in 1946, Congress passed the Defense Production Act of 1950, which…

Brent CFD

Key words: BFOE Forwards, Dated Brent, Platts prices, CFD differential, Physical cargo trading and hedging, average CFD prices Brent Contracts for Difference (CFDs) are one period commodity swaps. As was previously explained in the article «Commodity Swaps», such swaps are cash settled and it can be said that all oil commodity swaps are CFDs. However,…

Brent / WTI spread narrows sharply

Key words: US oil export ban, Brent/WTI spread chart, Crude oil production The spread between two global oil benchmarks has finally vanished. It has taken almost two years until the spread stabilized. Despite of the fact that oil is a fungible commodity, we clearly saw how significant regional differences can impact oil prices. Today, when…