US Weekly Petroleum Status Report

There was a small draw in crude stocks last week, despite a dramatic drop in refinery utilisation as many refineries closed ahead of the Hurricane Ida. Notwithstanding, US gasoline demand remained strong, but we suspect that any boost to prices will be offset by softer Asian demand.
Caroline Bain Chief Commodities Economist
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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

Energy Data Response

US Weekly Petroleum Status Report

US commercial stocks fell as, despite some chunky falls in product demand, US demand is still outstripping supply. Although, the release did shows signs that crude production might finally be responding to higher prices.

1 December 2021

Energy Update

Strategic release of reserves is too little too late

The announcement of the co-ordinated release of oil reserves by the US and other large oil consumers should mean higher supply (and downward pressure on prices) but it will come at a time when we expect that the market will be in a surplus anyway. What’s more, the big risk is that the release prompts OPEC+ to slow or halt its output rises.

25 November 2021

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Commodities Economics Chart Book

Commodity prices on increasingly shaky ground

After sharp falls in the middle of the month, most commodity prices ended August broadly flat. However, we doubt it will be long before the downward pressure on prices intensifies again. After all, economic growth in most major economies now looks to be normalising following its surge from pandemic-induced lows, while growth in key commodity consumer China is entering into an outright decline. As a result, we continue to expect most commodity prices to fall in the remainder of this year.

3 September 2021

Commodities Weekly Wrap

Looking for direction

There wasn’t a clear direction in commodity markets this week, with most prices driven by commodity-specific factors. Natural gas and coal prices continued to surge, while the prices of some industrial metals struggled on the back of weaker China PMI data. Oil prices posted a small gain on the week, despite OPEC+ confirming that it will continue to gradually increase output in October, reflecting the fact that such a decision was generally expected. Indeed, the meeting was among the shortest in recent memory. We expect OPEC+ to stick to its current plans to increase production over the next year or so, and this underpins our view that the oil price rally has already peaked. The main focus next week will be on whether the latest set of trade data out of China, due on Tuesday, corroborates the softer PMI data from this week. With high frequency data suggesting that construction activity has dropped back, and foreign demand for Chinese products appearing to level off, we suspect that the recent downward trend in China’s commodity imports continued in August which should have negative implications for prices.

3 September 2021

Commodities Weekly Wrap

Dollar depreciation unlikely to last

There was a dramatic turnaround in the fortunes of commodities prices this week, with across-the-board gains as risk appetite picked up and the US dollar eased back. Fed Chair, Jerome Powell, was cautious about imminent Fed tapering at the Jackson Hole symposium on Friday, which added to positive investor sentiment. However, we think that an expectation of tighter Fed policy in response to persistently high inflation will push up US yields and boost the US dollar in the coming months, which will weigh on the prices of all commodities, but particularly gold.

27 August 2021
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