Energy Update

Energy Update

Oil demand to rise, but it won’t stop prices falling

Global oil demand looks to have held up much better so far in 2021 than during 2020, despite a resurgence of COVID infections in many parts of the world. We expect strong oil demand growth to continue for the rest of the year, but this won’t stop rising supply pushing oil prices lower by end-year.

17 June 2021

Energy Update

Higher oil production to weigh on prices in 2022

Higher production from OPEC+ member states and in the Americas means that global oil production is set to rise sharply over the next eighteen months. This is the reason why we expect oil prices to fall from Q4 this year and throughout 2022.

16 June 2021

Energy Update

Restocking boost to LNG prices to fade soon

After rising (and falling) sharply at the start of the year, Asia LNG prices have started to push higher again recently. This latest rise seems to have been driven by a rebuilding of stocks, which should run its course over the coming months. That said, the outlook for spot Asia LNG prices further ahead remains bright.

9 June 2021
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Energy Update

Strong demand to keep the Pacific coal price high

The price of Pacific coal has surged to just over $100 per tonne for the first time since 2019. We think that the price will remain elevated for the rest of this year in large part owing to strong demand.

Energy Update

Deal or no deal, Iran’s oil output set to rise this year

A revival of the nuclear deal with Iran would pave the way for sanctions to be lifted, boosting the country’s oil production and weighing on prices. By contrast, while we still expect Iranian output to increase if a deal isn’t agreed, we think this would probably lead to a higher risk premium in the oil price.

Energy Update

Brent-WTI price spread likely to remain narrow

We think that the absence of pipeline capacity constraints, a strong recovery in US oil demand, and increased output from OPEC+ members will all help to ensure that the Brent-WTI price spread remains narrow over at least the next year or so.

Energy Update

Weaker European demand won’t derail our oil forecast

While we have revised down our oil price forecast for Q2 and Q3 this year in response to the OPEC+ decision to ease production cuts, we still think a rebound in global demand will help push oil prices back above $70 per barrel. We expect weaker oil demand in Europe to be offset by a stronger rebound in consumption in the US and elsewhere, keeping the global oil market in deficit for the rest of 2021.

Energy Update

Higher OPEC+ production to limit oil price gains

The recent decision by OPEC+ to increase its oil production quotas and the prospect of higher Iranian output point to a smaller global oil market deficit this year than we had previously envisaged. Nevertheless, the persistent deficit means that we still expect oil prices to rise in Q2 and Q3 – just not by as much – before starting to slip in the final quarter as OPEC+ production continues to increase.

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