Take aways:

• Freight rates are rising again and it will likely impact USD inflation in Q2 already
• The Saudis are trying to bring back the oil bulls via keeping the market tight
• Our models are close to entering a long oil bet again..

Welcome to another Energy Cable from a gloomy and windy Copenhagen.

We finally have action in freight rates, hence why we wanted to hone in on that. A few weeks ago we wrote that no news is bad news in shipping/global trade space even though freight rates had been tumbling since January highs. The seasonal trade patterns are starting to kick in leading to an increase in volumes putting upwards pressure on freight rates.

Over the last few weeks rates have been on the move putting further pressure on goods prices as we are now 50% above prices pre Middle East troubles for the route between Shanghai and Europe.

We see that price expectations, here shown from Germany by the Ifo, have responded as well with the latest reading from last week showing a bump.

Chart 1.a: Second week in a row with rising freight rates

Chart 1.b: Rising price expectations in Germany as well

So how to invest given this? Read along below..