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Click here to read the full report. Overview – We expect most commodity prices to drift lower in the near term as advanced economies enter mild recessions and financial market risk aversion persists. A stronger US dollar will also weigh on prices. …
31st March 2023
Demand holding up for now, but it may be on borrowed time Commercial crude stocks fell sharply this week as imports fell to a two-year low and refinery activity increased. Meanwhile, product demand continued to expand. As higher interest rates translate …
29th March 2023
The EU’s Net-Zero Industry Act announced last week aims to keep the manufacture of clean technologies within the EU and shows that global fracturing will take place within blocs as well as between blocs over the coming years. But the bigger picture is …
24th March 2023
US natural gas prices have plummeted recently amid subdued demand and elevated stocks. However, demand is expected to revive this year and next, which will put upward pressure on prices. The price of US gas (Henry Hub) has collapsed from a peak of $9.7 …
22nd March 2023
Crude stocks rise again, but it’s the Fed that will move oil prices Commercial crude stocks rose slightly this week, although product stocks fell as domestic demand and exports both picked up. But all eyes are on the Fed’s monetary policy meeting later …
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
While commodity prices have also been caught up in the chaos stemming from the banking sector turmoil, so far the impact hasn’t been too alarming as price falls for most commodities haven’t been overly large. Where those falls have been greatest, such as …
17th March 2023
Commodity prices have tumbled as concern about a banking crisis has grown. The downside risks to our forecasts, which we recently attributed to higher interest rates, now include banking sector stress. There has been a renewed fall in commodity prices …
16th March 2023
Crude stocks rise, but all eyes are on the banks Commercial crude stocks rose this week, but product stocks fell. That said, the bigger picture remains one of subdued domestic demand, which we expect to remain the case for some time yet. After a dip in …
15th March 2023
OPEC sticks together and will keep output constrained OPEC’s monthly report for March noted that the group has stuck to the production targets agreed in October last year. Accordingly, we have revised down our forecasts for the group’s output in 2023. The …
14th March 2023
The restoration of diplomatic ties between Saudi Arabia and Iran adds to signs that geopolitical tensions in the Middle East are easing, which may help to reduce risk premia in financial assets in the region as well as the oil market. Tensions will not …
13th March 2023
Commercial crude stocks fell for the first time in nine weeks last week, while implied product demand dropped. We think oil demand will remain soft as higher interest rates drag on economic growth. The EIA’s weekly US Petroleum Status Report showed that …
8th March 2023
JODI data on global oil and natural gas consumption show that global energy demand was weak in late 2022. China’s rapid reopening will likely boost demand for both. But plenty of downside risk remains. Advanced economies are either in the midst of a sharp …
The National People’s Congress (NPC) reports struck a cautious note on the outlook for economic activity in China this year. Fiscal stimulus will be limited and efforts to prevent “disorderly” expansion in the property sector are to continue. That said, …
Overview – We think prices will drop a little further in the coming months as economic slowdowns in advanced economies weigh on commodities demand, even as China’s economic recovery takes hold. However, the prospect of a higher for longer Federal Funds …
2nd March 2023
US crude exports could rise even further Commercial crude stocks rose only slightly this week but this was despite a jump in US crude exports to a new record. With US domestic fuel demand unlikely to surge anytime soon, crude exports should remain …
1st March 2023
Commercial crude oil stocks set to rise even further There was another strong rise in commercial crude stocks last week. With little prospect of any upturn in domestic demand anytime soon, commercial stocks should continue to rebound in the coming months. …
23rd February 2023
We don’t think that the election in Nigeria on Saturday will lead to a sudden improvement in crude oil production. The oil industry’s challenges in the country are too deep-seated. But the long-awaited Petroleum Industry Bill, passed in 2021, could at …
22nd February 2023
Russia’s crude oil production has, up until now, been remarkably resilient in the face of Western sanctions. But the recent announcement of a voluntary cut seems to be the first concrete sign that Russia is concerned about its ability to maintain output …
17th February 2023
A combination of higher interest rates and rising raw material prices have interrupted the long-term declines in the costs of renewables and battery power, and could push costs up further in the near term. However, such pressures will dissipate as policy …
16th February 2023
Commercial crude oil stocks looking healthy Commercial crude stocks rose to their highest since June 2021 last week due to lower refinery activity. With crude demand likely to remain sluggish over the coming months, and the US government set to sell …
15th February 2023
Output still below quota, demand will be key OPEC’s monthly report for February did not make any major revisions to its forecasts. That said, the group is clearly worried about both the outlook for global demand and supply from Russia. We think OPEC is …
14th February 2023
Refinery activity to remain subdued this quarter Commercial crude stocks rose again this week, despite a rise in inputs to refineries. That said, refinery activity is unlikely to pick up markedly in the coming weeks given ongoing maintenance and only …
8th February 2023
Overview – We think prices will ease back in the coming months as optimism about China’s reopening is tempered and slower economic activity in advanced economies weighs on demand. However, the prospect of Fed easing and stronger economic growth in 2024 …
3rd February 2023
The EU’s imminent ban on Russia’s refined oil may see EU prices rise, but major disruption is unlikely. Even so, Russia will find it more difficult to find new buyers for its refined oil than it did with crude. The EU will need to find alternate supplies …
Slow refinery rebound continuing to boost commercial crude stocks Commercial crude stocks continued to climb last week as refinery activity remained in the doldrums and net imports rose. We believe that a recovery in refinery activity and higher demand …
1st February 2023
Clear signs of weakening product demand Even though the recovery in refinery activity stalled last week, petroleum product stocks rose amid weakening demand, which we expect to persist for a bit longer as the US economy slows further. The EIA’s weekly US …
25th January 2023
Commercial crude stocks will continue marching upward Commercial crude stocks unexpectedly increased this week. Weak refining activity and stable production helped stocks build. We expect that slower US economic activity over the next six months will …
19th January 2023
The election of left-wing candidate Lula for a third term as Brazil’s president is unlikely to accelerate Petrobras’ sluggish shift towards large scale biofuel production. We expect proposed oil sector reforms to weigh on biofuel demand, while ongoing …
18th January 2023
OPEC keeps 2023 forecasts unchanged OPEC left its annual supply and demand forecasts broadly unchanged but tweaked the quarterly profile. Like us, the group expects demand to rise faster than supply, which is a key reason why we expect prices to rise over …
17th January 2023
Output from Franc e’s beleaguered nuclear industry jumped last month, raising hopes that a recovery is underway. However, we think any increase in France’s nuclear output this year is likely to be modest and will probably be offset by reactor closures in …
China’s rapid reopening and the likelihood of policy stimulus there has improved the macro-economic backdrop for commodities in 2023. But with developed economies in recession, and a somewhat stronger dollar and weaker US equities in Q1, we think a …
16th January 2023
Commercial crude stocks surge and could have further to rise Commercial crude stocks surged last week at the fastest pace since February 2021, as net imports rose and disruption to refineries lingered from the recent cold weather disruption. Going …
11th January 2023
European natural gas prices have halved over the past month as usage stayed low and LNG imports hit record highs. Barring dramatically colder weather, EU gas storage looks set to be in a more comfortable position than we had expected. As a result, we have …
6th January 2023
Hit to implied product demand from cold weather likely to be short-lived Commercial crude stocks rose last week due to refinery closures in the wake of the extremely cold weather. But this should be short-lived, with most refinery plants back online soon. …
5th January 2023
US demand looks set to hold up well, despite slower economic growth Commercial crude stocks rose last week owing to a rebound in net imports, which was largely the result of the reopening of the Keystone pipeline. More interesting was the jump in implied …
29th December 2022
Unusually, investors have been reducing their net-long position in the oil futures market, but increasing their position in industrial metals. We suspect this reflects optimism about China reopening at a time when the global economy is entering …
22nd December 2022
Flat US production will keep stocks low This week’s report showed a sizeable drop in commercial crude stocks as net imports fell sharply. With US production unlikely to rise by much and plans for strategic reserves to be refilled next year, crude stocks …
21st December 2022
The EU’s new policy to limit gas prices is unlikely to be activated next year. And with so many caveats built in, it seems the only thing countries agreed on was that a cap was indeed needed to show unity. We are sceptical that the EU’s mechanism to cap …
20th December 2022
Click here to read the full report. Overview – Tight financial conditions and China’s biggest COVID outbreak yet mean global economic growth will slow further in the first quarter of next year, dragging most commodity prices lower. The slowdown will be …
16th December 2022
This is part of a series of reports outlining our key macro and market calls for 2023. Click here to view the full series. We think most commodity prices will ease back in early 2023, at the height of the global recession and monetary tightening in …
Bumper rise in crude stocks, little in the details to explain it While this week’s report revealed a whopping increase in commercial stocks, prices were up a little following the release. Instead, most attention is on the latest oil demand forecasts …
14th December 2022
OPEC lowers its oil demand forecasts for H1 2023 OPEC lowered its world oil demand forecasts for the next six months yesterday, but raised its demand forecasts for the following six months. This supports our view that the cut to OPEC+ output quotas from …
The recent slump in oil prices tells us one thing – that demand concerns are in the driving seat. Given that we expect a further slowdown in global growth in Q1 2023, we think prices could fall further. The Brent crude oil price has fallen by about 16% …
13th December 2022
Even if oil prices don’t rebound substantially in the near term, we doubt developed market equities in the energy sector will reverse course and underperform the rest of the stock market next year. Developed market (DM) energy stocks have outperformed the …
9th December 2022
Rising product stocks should eventually translate into lower crude demand Commercial crude stocks fell again, but there were some chunky builds in product stocks. Given the rise in stocks, product prices should fall further, which will eventually lead to …
7th December 2022
There are only a few days to go until the next packages of EU sanctions on Russia targeting its oil trade come into force. There are a few key details still left to be finalised, but it seems to us that disruption to Russia’s oil trade and production is …
2nd December 2022
Refineries may reduce output soon amid soft domestic demand Commercial crude stocks plunged as the refinery utilisation rate rose, net imports fell sharply and strategic reserve releases continued to wind down. However, signs of lower domestic product …
30th November 2022
With China now battling its most widespread COVID-19 outbreak since the start of the pandemic, the country and its economy face a dire few weeks. As a result, China’s demand for oil will come under pressure, and potentially its demand for natural gas and …
25th November 2022
Commercial crude stocks fell for a second consecutive week and are likely to come under further pressure if strategic reserve releases wind down. Despite this, oil prices slid on demand worries and as rumours around the G7’s plan to cap the price of …
23rd November 2022
