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With the means, motive and opportunity for Saudi Arabia to undergo a reversal in oil policy falling into place, this Update thinks through the possible ramifications of such a move. In short, considerable spare capacity in OPEC and more resilient …
17th October 2024
The pledge at this weekend’s press conference to increase fiscal expenditure could support China’s commodity demand over the first half of 2025. But at this stage, none of the fiscal or monetary policy announcements over the past month suggest that …
14th October 2024
Although the focus in the oil market has shifted to geopolitical risks and potential short-term supply disruptions, just as importantly, we think the possibility that Saudi Arabia could open the floodgates has increased in recent weeks alongside reports …
Stimulus bazooka wouldn’t stop prices from falling After investors were disappointed by the lack of major new fiscal stimulus from Chinese policymakers this week, the Ministry of Finance is expected to announce a more sizeable package on Saturday. Since …
11th October 2024
While electric vehicle (EV) rollouts in Europe and the US have stalled and are set to remain sluggish over the next few years, the uptake of EVs in China has surged beyond expectations. So, for all the focus on the near-term supply risks to oil, the …
9th October 2024
Risk premium takes the reins There are no prizes for guessing the main event of the week in commodity markets: the stark rise in the oil price since Tuesday after it became clear that Iran was readying to launch a missile strike on Israel has dominated …
4th October 2024
It’s too soon to say whether the Iranian missile strikes on Israel are the start of a conflict that will eventually result in oil supply being affected or if oil prices will drop back as the heightened risk premium in prices gradually unwinds. For now, we …
3rd October 2024
China’s recent stimulus announcements are still at the top of many investors’ minds, at least judging by the high level of client interest in the online briefing we ran on the topic yesterday. We’ve wrapped up our answers to the most common questions we …
Access to commodities – particularly critical minerals – is a growing area of competition between China and the West. And those EMs with deposits of the minerals used in new and low-carbon technologies are likely to see higher investment and, ultimately, …
Until the geopolitical situation in the Middle East deescalates, oil prices will clearly remain at risk of spiking higher. But against a backdrop of faltering demand and greater supply in the wider oil market, the risks to oil prices over the next year …
2nd October 2024
The strike by Israel in Lebanon that killed Hezbollah’s leader represents a major escalation of hostilities in the Middle East and all eyes are now on the next actions by Israel and Iran. On its own, this escalation would point to higher oil prices and …
30th September 2024
The stimulus packages announced by Chinese policymakers were the main reason behind the chunky increases in industrial metals prices this week, and explain why they performed better than most other commodity prices. However, the stimulus measures are no …
27th September 2024
Today’s news that Saudi Arabia will proceed with unwinding its voluntary oil output cuts from December does not change our thinking on the oil market balance; we still expect the market to be in a small surplus by Q4 2025 and prices to edge a little …
26th September 2024
While the announcement of new stimulus measures by Chinese officials coincided with increases in many commodity prices, the package does not materially alter the outlook for China’s commodity demand. This could change if fiscal stimulus was announced – …
25th September 2024
Overview – Prospects for supply continue to dominate the near-term outlook. This is particularly the case for energy markets, where a gradual unwinding of OPEC+’s voluntary production cuts and looming ramp-up in LNG exports from Qatar and the US are …
24th September 2024
The imminent closure of the UK’s last coal power plant is a further reminder that thermal coal’s days in Europe are numbered. In Asia, coal will remain a major source of power for many years to come but global demand will still slow as growth in India …
23rd September 2024
The Fed’s decision to cut interest rates by 50 bp gave most commodity prices a boost this week. We suspect that lower interest rates won’t have a sizeable impact on US commodity demand this quarter and, next year, prices are more likely to be driven by …
20th September 2024
While the green transition and AI-related use will boost demand for industrial metals over the rest of this decade, we expect this to largely be offset by a substantial contraction in demand from China’s construction sector. Against this backdrop, and …
19th September 2024
While media attention has been on the soaring prices of coffee and cocoa, the prices of many grains have slid lower since the start of the year. We think that prices will fall further by the end of 2025 as the market looks set to be amply supplied. …
18th September 2024
“Gold’s poor cousin” to lag behind For all the attention on gold this year, silver has been the better performer with prices increasing by over 25% year-to-date. Some of the tailwinds that have boosted the gold price, like lower Treasury yields and a …
13th September 2024
Saudi Arabia has cut oil output aggressively in the past two years but this has failed to prevent a slide in the Kingdom’s oil revenues. Officials are facing a tough choice over what to do next and, for now, we think that they will follow through with …
11th September 2024
The sell-off in oil markets so far in September, which gathered pace on Tuesday, has largely been driven by market concerns over demand. Although investors are correct to be worried about the structural headwinds facing China’s oil demand, they seem to …
Note: we will be hosting an online Drop-in on Wednesday 11th September at 3pm BST to discuss the outlook for gold prices. Sign up here . With a long and varied list of supportive drivers to choose from, we have raised our end-2025 gold price forecast to …
10th September 2024
With a large and growing population and a bright long-term economic outlook, the stage is set for India’s commodity demand to boom. However, there are several reasons why India won’t have the same profound impact on global commodity markets as China has …
Will OPEC+ ever increase output? The big news this week was the decision by some OPEC+ members to extend their voluntary output cuts until December. For context, these producers had originally announced they would begin raising output from next month. …
6th September 2024
OPEC+ to face stick or twist moment at next meeting The recent slide in oil prices, to a 14-month low of $73pb at the time of writing, makes the looming OPEC+ decision on whether to unwind its voluntary production cuts even more of a close call. On the …
5th September 2024
The latest drop in oil prices, coupled with our expectation for global demand to remain weak, will make it practically impossible for OPEC+ to increase output while keeping Brent crude prices above $80pb. Recent reports indicate the group is undecided on …
4th September 2024
Traditional gold drivers pick up the reins Much of the chatter in the gold market this year has been about the role of non-traditional drivers – particularly demand from China – in propelling the gold price higher. (Our latest Commodities Focus , …
30th August 2024
Against the backdrop of central bank buying, strong physical gold demand, and a surge in ETF holdings, China appears to have been a key driver of the rally in gold prices earlier this year. Looking ahead, we think that China’s appetite for gold will grow …
29th August 2024
The apparent stall in the ceasefire talks between Israel and Hamas limited the fall in oil prices this week. While we think a deal wouldn’t be a game-changer for oil prices, a further breakdown in talks could cause prices to spike. Meanwhile, data …
23rd August 2024
China’s announcement last week that it would curb exports of antimony, a critical mineral, was another example of global fracturing unfolding in the commodities arena. Recycling offers an obvious way for the US and its allies to shore up their own …
21st August 2024
The global macroeconomic risks surrounding a possible ceasefire deal between Israel and Hamas are asymmetric. An agreement – while having significant economic consequences for countries in the region – would probably not itself be a game-changer for …
19th August 2024
The strike at the world’s largest copper mine, Chinese export curbs on another critical mineral and the iron ore price tumbling to a yearly low rocked metals and minerals markets this week. While we suspect that global copper prices won’t be too affected …
16th August 2024
Developments in Ukraine have once again emerged as a key driver of EU natural gas prices. But a combination of lower gas use and the sourcing of alternative supplies in Europe means that the situation is very different to that during the energy crisis. …
12th August 2024
It was no surprise to see the global commodity price index fall and rise alongside the contortions in equity markets this week. But commodity prices have not all been in the same boat ; whereas some have remained buoyant throughout, others were already …
9th August 2024
US recession fears mask growing Middle East risks Commodities have not been immune to the recent turmoil in financial markets, with the prices of most industrial metals, agricultural, and energy commodities extending their downward trends over the past …
7th August 2024
Following another leg down in industrial metals prices, this time due to growing worries about a US recession and the broader financial market carnage, we still think that prices will fall further over the next few years. However, while attention has …
The sharp fall in oil prices over the past week shows that fears of a US recession have so far outweighed concerns about conflict in the Middle East. But we think that oil prices have fallen too far, and will rise back to $80pb by the end of the year. …
6th August 2024
The oil market's fairly muted reaction to events in the Middle East this week only temporarily reversed the recent downward trend in oil prices. On the face of it, however, the risk of a spike in oil prices which would likely arise from a more direct …
2nd August 2024
The rocket strike on the Israeli-occupied Golan Heights over the weekend has heightened fears of a full-blown conflict between Israel and Hezbollah in Lebanon. For Israel, this risks adding to pressure on its already strained public finances, and would …
29th July 2024
While many of Vice President Kamala Harris’ climate policies are likely to be similar to Biden’s, her track record suggests she could take a firmer stance on fossil fuel production. However, regardless of who wins the election, we think US crude …
26th July 2024
The start of the Paris Olympic Games today suggests that there will be renewed interest in gold, silver and bronze. We suspect that athletes will be disappointed by the fact that the Olympic medals are not worth their weight in gold. What’s more, with …
Booming demand for LNG in Asia this year has helped push prices in Asia to a sizeable premium over those in Europe. We think that this premium will remain above 10% over the rest of the year but will shrink when a huge increase in global LNG supply begins …
24th July 2024
Donald Trump has said that he could quickly end the war in Ukraine if he is re-elected as US President. This Focus answers key questions on what the shape of any agreement might look like, what might happen to sanctions on Russia, and the possible …
23rd July 2024
The weaker-than-expected economic activity data for China in Q2 weighed on industrial metals prices early in the week. The mood was further darkened by the lack of any specific stimulus announcements at the Third Plenum and resulted in most industrial …
19th July 2024
Gold jewellery demand has been highly sensitive to price changes in the past and so will come under pressure from the current backdrop of record high gold prices. Income growth in key markets will offset some of the demand destruction. But jewellery …
17th July 2024
The ~10% fall in EU carbon prices since the end of May has mirrored a similar-sized fall in European natural gas prices, and we forecast both to fall by a further 25-30% by year-end. That said, the fundamentals still point to large gains in the EU carbon …
Gold prices are going for gold…again The ~18% rise in gold prices seen this year has largely defied the traditional logic of demand drivers. Indeed, the surge in gold prices between February and April took place against a backdrop of a stronger dollar. …
12th July 2024
While the debate around China’s manufacturing overcapacity has centred around politically sensitive topics such as electric vehicles, its industrial metals sector is no exception. Whereas the focus of the broader macro debate revolves around market share, …
11th July 2024
Hydrogen could play a key role in reducing emissions in hard-to-abate sectors such as steelmaking and be a boon for countries and regions that are well placed to produce a surplus of renewable power. But hydrogen is not the best option in many …
10th July 2024
