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The collapse in oil prices in recent months has incentivised governments to increase their strategic petroleum reserves (SPRs). However, we don’t think that it will provide a boost to prices . SPRs are used to mitigate against oil supply disruption. …
17th April 2020
The unprecedented 9.7m bpd output cut announced by OPEC+ will merely reduce the oversupply of oil in the second quarter. But assuming full compliance, and an involuntary drop in North American production, the market could fall into a deficit later in the …
14th April 2020
There is huge uncertainty about the outcome of Thursday’s OPEC+ meeting. For what it’s worth, we suspect that a large and unconditional output cut is unlikely. Even if we are wrong, we think a sizeable output cut would merely put a floor under prices …
8th April 2020
Natural gas prices have reached historic lows in recent weeks, with US natural gas (Henry Hub) last week plumbing depths not seen since 1995. The near-term outlook for natural gas is bleak, but prices are likely to pick up in the second half of the year …
7th April 2020
Oil prices have surged by about 30% in recent days after President Trump said that a deal between Russia and Saudi Arabia to jointly cut oil production would come in a “few days”. We are sceptical that a deal will be agreed and, even if it is, we don’t …
3rd April 2020
The latest leg-down in oil prices is not so surprising given that demand is collapsing at a time of rising supply. We think oil prices will only pick up if, as we expect, economic activity revives later this year . Oil prices slumped again in early …
30th March 2020
The coronavirus is disrupting global economic activity by much more than we had previously thought. As a result, we now expect global oil demand to fall by 6.5% in 2020 to just under 94m bpd . Measures to contain the coronavirus have reduced global oil …
27th March 2020
While the price of Brent has dropped by nearly 60% since January, agricultural prices have so far held up comparatively well. Although we wouldn’t rule out agricultural prices falling further, the recent divergence in prices reveals that the relationship …
24th March 2020
Earlier this week, the virus-related economic disruption and the prospect of a surge in OPEC+ supply pushed the Brent-WTI price spread near to zero. Although it has since rebounded, we think the spread will disappear by the end of this year. And by 2021, …
20th March 2020
OPEC+’s decision to abandon output constraint has been a factor behind the ongoing slump in oil prices. In our view, higher OPEC+ supply will weigh heavily on US shale output, prices and the risk premium in the oil price . With the oil market’s attention …
19th March 2020
Oil prices have crashed by about 40% since end-January owing to the coronavirus-related demand shock and the collapse of OPEC+ output restraint. Following previous oil price crashes (2008 and 2015-16), prices rebounded quickly, but we do not think that …
10th March 2020
Against a backdrop of a coronavirus-related slump in demand, Saudi Arabia appears to have abandoned efforts to balance the oil market and is instead aiming to protect market share. Its pledge to significantly raise production from April will result in a …
9th March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
We think that, at least initially, the energy proposals of a Democratic President would support oil prices by curbing supply more than demand . All the major Democratic candidates disagree with the pro-fossil fuel agenda of President Trump, and they all …
28th February 2020
While the price of US natural gas (Henry Hub) has slumped on the back of coronavirus-related concerns, it has fared better than natural gas prices elsewhere. And given the low exposure of US LNG exporters to areas affected by the virus, we expect Henry …
21st February 2020
LNG prices should recover from their current coronavirus-related lows by end-year. But given the significant oversupply in the market, prices are likely to remain historically weak . We had always expected average LNG prices to fall this year owing to …
13th February 2020
The economic disruption caused by the coronavirus means that we now expect the oil market to be in a surplus in Q1 2020, as opposed to the deficit that we had previously envisioned. However, providing that the virus is contained, we think that demand will …
11th February 2020
Our analysis suggests that it is difficult to square the coronavirus-led sell-off in oil markets with the fundamentals. Instead, we think the move is rooted in a marked deterioration in investor sentiment which, if signs emerge that the virus is being …
29th January 2020
There has been a muted response in commodities markets to the signing of the Phase One trade deal between the US and China, perhaps because the good news was already priced in. That said, it may also be a reflection of the fact that China’s promises to …
16th January 2020
We think that oil prices will rise in 2020, as the market moves into a small deficit. In contrast, we expect natural gas prices to fall owing to strong supply growth and for this, in turn, to dampen coal prices . Last year, we forecast that the global …
10th January 2020
Following the recent rise in US-Iran tensions, we estimate that the risk premium in the oil price briefly turned positive. After all, prices rose without there being any disruption to the physical supply of oil. However, regardless of what happens to the …
9th January 2020
The oil price has jumped today on the back of the US assassination of a powerful Iranian military leader. Given the backdrop of improved investor sentiment in the oil market, prices could remain elevated. That said, regardless of geopolitical events, we …
3rd January 2020
US commercial crude stocks remained high in 2019 owing principally to strong domestic production and increased Strategic Petroleum Reserve (SPR) releases. Looking ahead, we think that a further rise in export growth and higher domestic demand will reduce …
20th December 2019
ESG rules won’t significantly deter investment in International Oil Companies (IOCs) or reduce fossil fuels production. Instead, output is likely to be guided by underlying oil prices, which we expect to fall over the medium-term. We suspect that price …
19th December 2019
If enacted, we estimate that the Trump Administration’s reported proposals for altering fuel efficiency standards in automobiles will mean that US gasoline consumption will be around 0.3m bpd higher than would otherwise be the case by 2026. This would be …
18th December 2019
Since the imposition of US sanctions in May 2018, Iranian oil production has fallen by nearly 45%. For our part, we think that output would recover quickly if sanctions were lifted. Moreover, we see little risk of Iran’s oil industry suffering the same …
27th November 2019
Palm oil prices have soared recently in part because of unfavourable weather, which has clouded the outlook for supply. At the same time, we think that demand from the world’s top consumers is set to rise strongly. As a result, we expect prices to …
13th November 2019
Despite steadily rising supply, strong demand growth and expanding export opportunities should ensure that the average price of US natural gas (Henry Hub) will be higher in 2020 than 2019 . The year-to-date average Henry Hub price is 14% lower than in …
8th November 2019
We think that the forthcoming Saudi Aramco IPO is unlikely to have much of an impact on Saudi Arabia’s oil policy or on global oil prices either now, or in the future. Instead, Saudi output in the coming decades is likely to be dictated by a need to sell …
7th November 2019
Recent construction delays to Nordstream 2 mean that the Russia-EU gas pipeline is likely to miss its scheduled completion date of December 2019. While we suspect that surging supplies of LNG from the US and Australia would limit any short-term price …
25th October 2019
Subdued global economic activity will weigh on oil demand next year. That said, we expect GDP growth to gradually pick up over the course of the year, and new International Maritime Organization rules (IMO 2020) to boost crude demand from the shipping …
16th October 2019
We expect that global oil supply will remain constrained in 2020. But we also forecast somewhat stronger growth in demand next year and a pick-up in risk appetite on the back of monetary easing. As a result, we are raising our forecast of the price of …
9th October 2019
Lower production in Saudi Arabia and the lower-than-expected US output growth have led us to revise down our global oil supply growth estimates. We now expect the market surplus to be smaller than we had previously expected in 2020, which will support …
23rd September 2019
US production of light crude oil will continue to grow in the coming years, and we expect that this will lead to the US becoming a net exporter of crude oil by 2021 . US oil production has grown sharply from 5.5m bpd in 2010 to 12.4m bpd currently, owing …
19th September 2019
Given the uncertainty about the impact on supply of this weekend’s attack on Saudi Aramco, we are not changing our oil price forecasts yet. However, in this Update , we outline three possible scenarios that could develop and what they would mean for …
16th September 2019
The usual seasonal uplift in demand should support the price of Pacific coal until end-2019. However, we expect average prices to fall in the years ahead owing in large part to weaker demand prospects . The price of Pacific coal has tumbled over the past …
10th September 2019
The policies of the next European Commission are likely to speed up the EU’s ongoing transition towards a greener energy future. However, its impact will probably not live up to expectations . President-elect of the European Commission, Ursula von der …
29th August 2019
While the US-China trade war has escalated, we had already expected the two countries’ dispute to deepen. Meanwhile, although a thawing of US-Iran relations could mean a return to the market of Iranian exports, this seems a long way off. As such, we see …
27th August 2019
A no deal Brexit later this year could mean that the UK government decides to substantially reduce its strategic reserves of petroleum products. But even after a reduction, the UK’s reserves should remain ample. What’s more, any sell-off in product stocks …
23rd August 2019
The dramatic narrowing of the spread between the prices of Brent and WTI oil in the last month, reflects a structural change in the market as logistical bottlenecks in the US are being resolved. As such, we expect the Brent-WTI spread to trade in a much …
20th August 2019
The raft of liquefied natural gas (LNG) projects in the works suggests that the downward pressure on prices from surging global supply will continue this year and next. But with demand growth set to remain healthy, and the stream of new projects likely to …
13th August 2019
In this Update we are launching our coverage of the European TTF natural gas price. In short, we think that surging global supply of liquefied natural gas will keep EU markets amply supplied over the next few years. As such, we expect only a modest rise …
1st August 2019
We think that the OPEC+ production cuts will fail to reduce global crude stocks. Instead, we expect soft demand growth and rising global supply, particularly from the US, to push stocks higher in the remainder of this year, which underpins our forecast of …
12th July 2019
Concerns about a shortfall in global oil supply have resurfaced as a result of the escalation in geopolitical tensions surrounding Iran. But we think there are four key reasons why the risk to supply is less now than back in 2011, when hostility between …
25th June 2019
The decision by the US to impose sanctions on Venezuela’s state-owned oil company, PDVSA, will lead to a large loss of export earnings in the next few months. If Maduro can cling on to power during this time (perhaps by securing loans from China and …
29th January 2019