Energy

Energy Data Response

US Weekly Petroleum Status Report

A large fall in the refinery utilisation rate drove another increase in stocks last week, although utilisation rates are normal for the time of the year. And with output set to remain constrained until at least early next year, already-high crude prices should remain elevated for the next few months.

14 October 2021

OPEC Watch

OPEC Monthly Oil Market Report (Oct.)

OPEC moved closer to its collective target output last month. However, it is now clear that if the group were to answer calls to raise output, it would involve abandoning the current quota system and allowing a few producers with available capacity to produce more.

13 October 2021

Energy Update

Natural gas prices now untenably high

The price of European natural gas (TTF) surged by around 35% this morning, before crashing back down on Putin’s reassuring comments about Russian supply. The latest price moves appear speculative, and we retain our view that it is just a matter of time before supply and demand adjust to bring prices back down.

6 October 2021

Our view

We expect a gradual normalisation in oil demand growth and a rebound in supply to start to weigh on oil prices as we move into 2022. So far this year, growth in demand has outpaced supply, helping push prices to multi-year highs, but we expect this dynamic to reverse as OPEC+ brings capacity back on line and major economies move past reopening-related growth. Oil prices have also received a boost from the recent surge in natural gas prices, based on an assumption that power producers will switch from natural gas to oil. However, we do not expect this to become widespread. In Europe, for example, only a limited number of power plants have the capacity to use liquid fuels. We do expect prices of natural gas, and coal for that matter, to remain high over the next few months, as stocks are abnormally low; but, again, we expect prices to decline next year.

Latest Outlook

Energy Outlook

Downhill from here

After a blistering rally for much of 2021, we expect the prices of energy commodities to be easing back as we move into 2022. Oil supply, particularly from OPEC+, is set to rebound strongly over the next year, which will be a factor weighing on oil prices. Elsewhere, demand for natural gas and coal in power generation has been boosted this year by extreme weather events, which suggests it will fall back if temperatures normalise. Supply of natural gas should also pick up in 2022, which should add to downwards pressure on prices. At the same time, ongoing efforts to decarbonise should weigh on global demand for coal and its price.

3 August 2021