Filtered by Subscriptions: Energy Use setting Energy
We expect global crude production to rise by around 2.5% in 2025 as the unwinding of OPEC+ voluntary supply cuts stretches all through next year. But non-OPEC+ oil producing nations will also play their part in raising supply even if we think US oil …
14th March 2024
The winner of Russia’s election may be a foregone conclusion but the outlook for its oil and gas sector isn’t. A tightening of sanctions is an ever-present risk and the outcome of the war is uncertain. Our central case is that sanctions don’t prevent …
13th March 2024
Oil prices have so far shrugged off disruptions to shipping in the Red Sea and the risk of wider conflict in the Middle East. Prices were supported by the OPEC+ decision to roll over production cuts until Q3. We expect that the group will gradually unwind …
11th March 2024
China’s government is planning further fiscal loosening and hinting at rate cuts this year, with the aim of boosting economic activity. We think the policy backdrop is sufficient to support commodities demand this year, although for metals used in …
6th March 2024
Despite OPEC+’s decision to extend its voluntary production cuts until the end of June, we still forecast oil prices to drop back by end-2024. We continue to expect OPEC+ to raise output in the latter half of the year and other producers will plug the gap …
4th March 2024
Although the US’ trade in electricity with Canada and Mexico is small compared to its overall energy trade, it should grow as clean energy capacity rises and grid connections improve. Canada should continue to be a net exporter as hydropower flows south …
28th February 2024
Carbon price not out of the woods yet …
22nd February 2024
This report is the third of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It takes an in-depth look at the various factors that typically drive the EU carbon price in the short term. While supply …
This report is the second of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It sets out our approach for modelling the fundamental price of an EU carbon permit [1] over the rest of this decade. In …
This report is the first of a three-part mini-series that establishes a framework for assessing the outlook for the EU carbon price. It starts by explaining what an emissions trading scheme (ETS) is and how the ETS has evolved since its introduction in …
The precipitous drop in US natural gas prices won’t persist for the rest of the year. Prices should rise by Q4 as US production growth slows and LNG exports rise. US natural gas prices have collapsed recently, falling around 18% week-on-week and 23% …
14th February 2024
Energy prices have so far shrugged off disruptions to shipping in the Red Sea and the risk of wider conflict in the Middle East. If energy production continues to be largely unaffected, we expect most prices to fall further by the end of the year. Greater …
5th February 2024
We have revised down our forecast for US natural gas prices this year, as the outlook for domestic supply has improved. In the near term, a perfect storm of impediments to exports has emerged and sent spot prices tumbling. Henry Hub was down by over 20% …
2nd February 2024
Saudi Arabia has cut oil output significantly over the past year or so but that hasn’t prevented global oil prices from falling. Despite Aramco’s announcement today that it is postponing plans to raise production capacity to 13mn bpd, we think looming …
30th January 2024
JODI data on global oil and natural gas consumption paint a nuanced picture of global energy demand. While oil demand growth slowed towards the end of last year, consumption of natural gas was recovering from the worst of the energy price crisis. We …
29th January 2024
This is a special Global Economics Chart Pack that provides clients with key analysis to make sense of the macro and market impact of the disruptions to maritime shipping. The charts in this document come from our brand-new shipping dashboard , which …
25th January 2024
Energy prices seem historically high at first glance. However, that is not strictly the case. After adjusting for inflation, oil and US natural gas prices are already at or below pre-pandemic levels. Meanwhile, gas prices are still very high in the EU and …
19th January 2024
Following a period of upward pressure on renewable and battery costs in recent years, the tide is turning once again. This partly reflects declines in key input costs such as lithium, as well as huge growth in global manufacturing capacity, particularly …
18th January 2024
The downward trend in the EU carbon price since early 2023 has been driven by lower demand for pollution permits on the back of industrial weakness and growth in cleaner energy sources. With energy-intensive activity in the bloc set to stay weak, and …
17th January 2024
Perhaps surprisingly, the latest escalation in Middle East tensions has not prompted a surge in oil prices. We think this is because, so far, oil output is unaffected. Moreover, we suspect it also reflects concerns about weak demand, strong supply growth …
16th January 2024
The surge in US exports of energy over the coming five years will ensure that the US remains a major supplier of fossil fuels to the rest of the world. A large proportion of these exports will be LNG, as new export terminals come online. But exports of …
10th January 2024
Energy prices will fall in 2024, although we think the big falls are now behind us. Supply has not been directly affected, but the Israel-Hamas conflict together with the tensions in the Red Sea have increased volatility in energy markets. We expect oil …
4th January 2024
Output from Nigeria’s oil refinery sector has been in terminal decline, inflating the fuel import bill at a time when the economy is already suffering from a shortage of hard currency. The new Dangote refinery and President Tinubu’s broader plans to …
The high profile announcements from COP28 around renewable capacity pledges and fossil fuel usage are ambitious, but strike us as either overly optimistic or vague. While we think renewable energy consumption will increase markedly, fossil fuel usage is …
21st December 2023
The attacks in the Red Sea are the third major disruption to maritime transport this year, alongside low water levels in the Panama Canal and collapse of the Black Sea Grain Deal. Much will depend on how long the disruptions last, but we think that they …
19th December 2023
Overview – We expect most commodity prices to rise in 2024 as major central banks loosen monetary policy and economic activity starts to pick up. Meanwhile, China’s policymakers have taken steps to support the ailing property sector, which should be less …
15th December 2023
The target from COP28 to triple global renewable generating capacity this decade is encouragingly ambitious. But as our Climate Reporting Tools show, the goal will be easier to achieve in some countries than others, and attention will also be needed on …
14th December 2023
The US dollar and the prices of major commodities, in aggregate, have often risen and fallen in tandem since 2021, in contrast to their strong inverse relationship for much of the past two decades. While we wouldn’t go as far as classifying the greenback …
12th December 2023
Europe’s natural gas price will continue its downward trend in 2024-25 as more LNG supply enters the market . And while there may be some recovery in demand as prices fall, we think there has been a structural shift down in European gas consumption. While …
8th December 2023
China’s commodity imports mostly rose in November, but there was a sharp drop in crude oil imports. We think that non-oil commodity import volumes will hold up in the coming months on the back of looser fiscal policy, but current high stocks could …
7th December 2023
Rising OPEC+ output in Q2 2024 should leave global crude supply less constrained than we had previously expected. This, together with only modest growth in global oil demand, should push the crude market into a small surplus in Q4. Accordingly, we have …
4th December 2023
The voluntary production cuts announced by OPEC+ this week will support oil prices in the first quarter of next year, but there is clearly dissent among the ranks. We think OPEC+’s next move will be to increase production. After much wrangling, some …
1st December 2023
Today, OPEC+ announced 1mn barrels per day (bpd) of voluntary cuts to supply in Q1 2024. This comes on top of around 5mn bpd in cuts already in situ, and brings the total cut in the first quarter to around 6% of global production. The group is presumably …
30th November 2023
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
Guyana’s oil production looks set to grow quickly over the next few years even if the total volume can only play a small role in raising global supply. That said, substantial reserves and low break-even costs should mean that it can continue to produce …
27th November 2023
Coal prices in both Europe and Asia will fall next year as growth in demand eases. But the fall in Europe should be larger as we expect demand there to outright contract. This should ensure that coal prices in Asia trade at a premium to prices in Europe …
22nd November 2023
The US and China once again backed the G20 goal of tripling global renewable energy capacity this week (from 2020), a goal which would help to keep the path to net zero emissions by 2050 on track. However, the speed of the energy transition is uncertain, …
17th November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
The Vaca Muerta shale formation will alleviate some of the pressure on Argentina’s fragile balance of payments position by substantially reducing the country’s gas import bill and raising oil export revenues. While this is good news for the crisis-ridden …
8th November 2023
Energy prices will remain historically high over the remainder of this year. The Israel-Hamas conflict has increased volatility in energy markets, but supply has not been disrupted. Oil prices will remain high as OPEC+ output cuts keep supply constrained. …
3rd November 2023
The underperformance of wind and solar equities since early 2021 has largely been driven by higher interest rates, which disproportionately affect the cost of renewables projects. But while the days of ultra-low financing costs are behind us, our …
2nd November 2023
We think the cautious oil market reaction to the outbreak of conflict in Israel probably reflects the huge uncertainty about the eventual outcome, but also a somewhat lower “Middle East” risk premium. For context, the Brent crude oil price has risen by …
26th October 2023
The war between Hamas and Israel – and the potential for escalation to the wider region – has increased the uncertainty around the economic and financial market outlook, but in most scenarios is unlikely to generate a sustained hit to major asset markets. …
EU natural gas prices have risen in recent weeks highlighting that a reliance on LNG imports is not without risk. That said, prices should fall back next year as a significant amount of LNG export capacity comes online, first in the US and then in Qatar. …
25th October 2023
Argentina’s oil and gas production growth has slowed sharply recently due to pipeline capacity constraints. New projects should ease these bottlenecks, and production should rise from 2024. Admittedly, the expected increases in output are not large enough …
It was generally a strong week for commodity prices as mounting geopolitical tensions boosted the oil price. In turn, higher oil prices put upward pressure on most agricultural prices. (See Chart 1.) Chart 1: Price Changes (%, w/w) Source: Refinitiv …
20th October 2023
2023 is on track to be the warmest year on record, but somewhat ominously the headwinds to the green transition have strengthened this year. Some of these will prove temporary, particularly as short-term policy interest rates start to come down. That …
19th October 2023
After several years in a post-Fukushima wilderness, nuclear power’s ability to provide low-emission and reliable electricity generation has slowly brought it back into favour around the world. Several countries, particularly in Asia, are likely to bring …
The reported deal that is close to being reached to lift US sanctions on Venezuela’s oil sector in return for competitive elections would help to raise the country’s oil output from very depressed levels. But the sector requires enormous investment to …
16th October 2023
The conflict between Hamas and Israel will negatively affect Israel’s natural gas exports. However, the bigger concern for global natural gas prices is the risk of the conflict spreading. The European natural gas price has risen by about 30% w/w to €48 …
12th October 2023