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.
Caroline Bain Chief Commodities Economist
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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

Energy Data Response

US Weekly Petroleum Status Report

US commercial stocks rose due to a pre-planned release of reserves and a large drop in exports. But the bigger picture is that product demand remains healthy, adding pressure to a tightening market.

24 November 2021

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.

24 November 2021

More from Caroline Bain

Energy Watch

Latest natural gas price surge will unwind

At the time of writing, global natural gas prices are soaring. Dramatic moves in global natural gas prices are nothing new and not even very surprising given the extreme weather over the past year or so. In this Energy Watch, we consider earlier spikes in natural gas prices and discuss whether this time is different.

In view of the wider interest, we are also sending this Energy Watch to clients of our Commodities Overview service.

1 October 2021

Commodities Update

China’s power shortage curbs metal supply & demand

China’s manufacturing PMIs for September diverged, but both still point to subdued commodities demand. What’s more, the surveys were conducted before power shortages started to constrain activity. Weaker industrial activity should put downward pressure on most commodity prices but, in the case of some metals, it could also lead to lower supply. In view of the wider interest, we are also sending this Commodities Update to clients of our Metals service.

30 September 2021

Commodities Weekly Wrap

Downward pressure on prices is mounting

Commodity prices held up well this week, despite the hawkish tone of the Federal Reserve and continued worries over a messy default by Evergrande, the Chinese property developer. Notably, European natural gas and Asian LNG prices continued to climb, powered by ongoing supply disruptions and unseasonably strong demand. Oil prices also made gains amid concerns that OPEC members are struggling to hit collective production targets which, if sustained, poses an upside risk to oil prices. Looking towards next week, Chinese PMI data are scheduled for release on Thursday/Friday. We expect a continued loss of momentum in industrial activity, which would be negative for commodity prices, especially industrial metals. Investors will also be closely watching developments around Evergrande. We expect a managed restructuring of the company, which should limit the negative impact on China’s metals demand.

24 September 2021
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