Energy Data Response

US Weekly Petroleum Status Report

US commercial stocks remained range-bound, but there were sizeable additions to stocks of petroleum products. That said, implied product demand remains solid, despite rising new COVID-19 infections. Unless travel restrictions are re-imposed, we expect US oil demand to hold up in the coming months.

8 December 2021

Commodities Economics Chart Book

The net effect of Omicron on commodities is not clear

Most commodity prices have fallen in the last week or so following the identification of Omicron – a new, and potentially more transmissible, strain of COVID-19. However, while commentary has generally focused on the effects that the new strain and associated lockdown measures may have on commodity demand, less attention has been paid to the implications for supply. After all, OPEC+ has left the door open to a change in output quotas before the group’s next meeting in early January. And, at a time of already declining stocks of industrial metals, there is a risk that the new variant prompts closures of major smelters and mines. As a result, we are leaving our price forecasts broadly unchanged for now. In view of the wider interest, we are also sending this Commodities Overview Chart Book to clients of our Energy and Metals Service.

7 December 2021

Energy Update

Revisiting our oil market outlook

Omicron will weigh on jet fuel demand in the next few months, but the wider hit to demand is still unclear. And although OPEC+ decided to push ahead with its planned oil production increases, we think it will struggle to raise output by as much as planned next year. So, for now, we are leaving our end-2022 oil price forecasts unchanged, but downside risk has risen due to the threat to demand.

3 December 2021

Most Recent Alerts

8 hours ago

Energy Data Response

US Weekly Petroleum Status Report

Our view

We expect oil prices to fall next year as demand growth normalises and supply continues to rise, especially from OPEC+ as the group unwinds its collective production cut. Taken together, we think this will cause the global oil market will tip into a surplus for the first time in two years. Meanwhile, natural gas prices remain high by historical standards, but coal prices have fallen sharply over the past month on the back of a sharp rise in Chinese coal production and a rise in stocks. We expect natural gas and coal prices to both gradually decline next year as demand growth slows and supply improves.

Latest Outlook

Energy Outlook

Prices to come off the boil in 2022

Following sizzling rallies in the prices of energy commodities in 2021, we expect prices to ease back in 2022 on the back of lower growth in demand and improved supply. Current high prices will incentivise producers to raise output and will lead to some rebuilding of global stocks by spring 2022, which will allay fears about supply. Of course, the main risk to our forecasts, particularly for natural gas and coal, is unseasonable weather which could keep prices higher for longer.

1 November 2021