Filtered by Subscriptions: Energy Use setting Energy
China’s refineries pumped out more oil products than at any point in their history in the first four months of this year. This is perhaps not too surprising given that the removal of COVID-19 restrictions was always going to give a boost in demand. But a …
25th May 2023
The long-awaited inclusion of WTI Midland into Dated Brent is now taking place in a gradual month-long process that started on 2 nd May. The inclusion of Midland could be a factor weighing on the Brent-WTI price spread in the coming months, but we …
24th May 2023
The key message from the latest China PMIs is that whilst China’s economy is likely to grow strongly this quarter, momentum is fading. This will be one factor weighing on commodity prices in the near term. China’s Caixin manufacturing PMI fell from 50.0 …
4th May 2023
JODI data show that oil demand held up in advanced economies at the beginning of the year. We suspect this won’t last though as weakening economic activity drags on demand over 2023. The data also show that natural gas demand in Europe fell in February, …
26th April 2023
Although equity and oil prices are usually positively correlated, we think equities will struggle in the next few months and that oil prices will end this year somewhat higher than they are now. We also expect a rebound in equities across the board in …
13th April 2023
JODI data on global oil and natural gas consumption reveal that global energy demand remained in the doldrums around the turn of the year. We suspect a recovery in natural gas demand is more likely to occur than in oil demand, as prices of the former have …
6th April 2023
The surprise decision by OPEC+ to cut production has meant we have revised up our oil price forecasts for end-2023 and end-2024. This does not materially change our outlook for inflation in advanced economies. And we still think weak economic growth there …
5th April 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
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
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
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 …
8th March 2023
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, …
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
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 …
3rd February 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
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 …
17th January 2023
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
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
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
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
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 …
16th December 2022
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
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
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
High oil prices have led to a recovery in US oil investment this year. But US crude production gains have been tempered by rising business costs and an emphasis on returning profits to shareholders. We expect the situation to be similar next year, with US …
21st November 2022
The negative correlation between the US dollar and the price of oil has reasserted itself in recent months, and we think it will persist as the looming global recession pushes the dollar higher and oil price lower. Although the price of oil hasn’t risen …
16th November 2022
US petroleum product prices have risen again, mainly due to refinery-side supply constraints. We think this will translate into fewer product exports, but potentially even more crude oil exports. As we expected, US wholesale fuel prices have remained …
8th November 2022
China’s latest trade figures point to weak commodity demand both domestically and globally. Given that we don’t expect the slowdown in global economic growth to trough until early next year, we think commodity demand will remain subdued for a while …
7th November 2022
While front-month European natural gas prices have fallen sharply as concerns have eased around shortages this winter, longer-dated futures haven’t fallen by as much. That reflects how difficult it will be to fill storage without Russian gas flows next …
4th November 2022
We expect European natural gas prices to be high in 2023 as the EU will need to replace Russian gas supply for the entire year. This means demand for LNG imports will be strong, even if gas consumption falls. We forecast that the natural gas price (TTF) …
25th October 2022
Central banks have the tools to deal with liquidity crises arising from rising interest rates and falling asset prices. Instead, the bigger threat is that higher interest rates produce large and simultaneous falls in asset prices that threaten the …
11th October 2022
Yesterday’s decision by OPEC+ to cut oil production quotas by 2mn bpd adds to signs that, in a world economy that is fracturing, Saudi Arabia is tilting away from the US and leaning towards a China-led camp. That would threaten to undermine the push by …
6th October 2022
With the winter fast approaching and concern about natural gas supply from Russia looming large, we reviewed the relationship between temperature and gas demand in the EU. The key point is that the temperature, whilst important, will be a weaker driver of …
30th September 2022
Thermal coal prices in Asia rose to record highs in early September and have only fallen back slightly since. This was despite no major supply disruptions and in contrast to falls in other energy prices in Asia and Europe. It appears that demand for coal …
29th September 2022
Europe’s scramble to replace Russian oil has left the price of Brent crude trading at a substantial premium to WTI for most of this year. But we expect this premium to narrow in 2023-24 as low US stocks and high US exports boost the WTI crude price and …
9th September 2022
We don’t think Europe will be forced to widely ration natural gas this winter because the sky-high price should attract sufficient LNG from abroad to replace reduced imports from Russia, whilst also weighing on demand. However, we do see a few risk …
8th September 2022
A revived Iran nuclear deal would quickly bring an additional 1mn bpd of crude oil production online, which would directly weigh on global oil prices. But the bigger impact would be to make it less likely that supply cuts from OPEC+ would be used to …
31st August 2022
One left-field option for alleviating Europe’s gas crisis that has been doing the rounds is the potential for asking Norway to discount the price of its gas exports. This Update looks at eight key questions on the topic. In short, an agreement would …
24th August 2022
We have revised up our forecasts of the European natural gas price due to the scale of Russia’s supply cuts and the likelihood that these are permanent. Prices should ease back in 2023 as Europe imports more LNG and demand falls, but we think they will …
With Russia tightening its squeeze on supply of gas to Europe, governments are turning their attention to other major gas exporters such as Qatar to try to fill the gap. But Qatar’s gas sector is already operating close to capacity and, while the North …
9th August 2022
Concerns about the demand outlook have dragged the Brent crude oil price towards $90 per barrel this week. But, the supply-side concerns which pushed the price over $120 per barrel not too long ago haven’t entirely vanished. Indeed, following the OPEC+ …
5th August 2022
The news today that Gazprom will further reduce its natural gas supply to Europe increases the likelihood of recessions in the euro-zone, UK and parts of Emerging Europe. It also supports our view that inflation pressures will be relatively persistent in …
26th July 2022
Europe’s heightened demand for LNG will be enough to keep prices high this year and into 2023, particularly as LNG supply growth will be fairly limited . The Asia-based spot price for LNG, together with its European counterpart (TTF), soared in the wake …
18th July 2022
After a period of extreme volatility, we expect the price of US natural gas to edge higher in the remainder of this year. Together, a rise in LNG exports and a pick-up in US consumption this winter will keep stocks low by past standards and underpin a …
11th July 2022