Energy

Energy Data Response

US Weekly Petroleum Status Report

US commercial crude stocks resumed their downward trend last week. With domestic output still well below pre-virus levels and product demand likely to rise, we think crude stocks will fall further from here.

28 July 2021

Energy Data Response

US Weekly Petroleum Status Report

US commercial crude stocks unexpectedly rose this week as net imports surged. Nevertheless, providing that the Delta virus variant doesn’t lead to the re-imposition of virus-related restrictions, we expect that product demand will gradually increase over the coming weeks which will weigh on crude stocks.

21 July 2021

Energy Update

Sky-high European gas prices unlikely to be sustained

We think a reversal of the factors that have fuelled the recent surge in European natural gas prices, namely high LNG prices, constrained supply and depleted stocks, will bring prices back down to earth by early 2022. However, a strong economic rebound and a high carbon prices should prevent the price of natural gas returning to its 2020 lows.

20 July 2021

Our view

We expect oil prices to rise a touch further in Q3 as the lifting of virus-related travel restrictions boosts demand at a time of ongoing US and OPEC+ supply constraint. However, we forecast that prices will start to fall back in Q4 this year and throughout 2022 as the market moves into a surplus on the back of rising supply and the normalisation of demand growth. Away from oil, the ongoing recovery in the global economy should boost consumption of both natural gas and coal, at least in the near term. Accordingly, we think that the average prices of both commodities will remain relatively high for the rest of this year.

Latest Outlook

Energy Outlook

A recovery in demand to support prices

The rebound in global economic activity this year will lead to a strong pick-up in demand for energy commodities. Arguably, this has already happened in the gas and coal markets as industrial activity has revived in both China and some developed economies. By contrast, oil consumption will remain subdued for a while longer in most economies until virus-related restrictions on leisure activity and travel are lifted, which we expect by Q3. That said, we also expect supply, particularly in the oil market, to bounce back and to increasingly act as a drag on prices as we move into 2022.

4 May 2021