Energy Update

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 Update

Omicron puts demand back in the spotlight

We were already downbeat on the outlook for most commodity prices in 2022, not least because we thought that prices had lost touch with demand fundamentals. The risk of Omicron-related effects on demand just adds weight to our view. In view of the wider interest, we are also sending this Commodities Overview Update to clients of all our Commodities services.  

29 November 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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Energy Update

A mild winter doesn’t change our price outlook

We have left our near-term forecasts for energy prices (which are historically high) unchanged after reflecting on the latest weather forecasts for the upcoming Northern Hemisphere winter. Temperatures are expected to be slightly higher than average over the next three months.

Energy Update

Taking stock of the European natural gas market

European natural gas prices were in the news again last week, soaring by 18%. Given stocks are still low and there are few signs of extra flows from Russia, we think that prices will remain high in the near term.

Energy Update

US oil production to rise but stay stuck in low gear

We expect US crude oil production to rise by the end of next year, but remain well below levels in early 2020. What’s more, with non-US oil production set to grow at a faster pace than US oil production, the Brent-WTI price premium is likely to remain narrow over the coming months.

Energy Update

Coal is back in fashion, but not for long

Coal prices are likely to remain high over the next six months as high demand weighs on already-low stocks. Prices should drop back next year, though, as demand growth moderates and supply improves.

19 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
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