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Oil & Gasoline – The price of oil declined over the past month as US-China trade tensions escalated, adding to fears that the global economy will continue to slow. Looking ahead, we think that demand growth will be subdued as the Chinese economy remains …
2nd 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
Despite the large draw, US oil demand is looking soft Another hefty drawdown in US commercial crude stocks last week might be taken as a bullish sign by oil markets. However, taking a closer look at the latest week’s figures, the picture painted of demand …
31st July 2019
Overview – We continue to expect that sluggish growth in global oil consumption will be a factor weighing on oil prices in 2019. Nonetheless, OPEC+ output cuts and the sanctions-related drop in exports from Venezuela and Iran will put a floor under …
26th July 2019
Hurricane Barry still distorting the figures A fall in production in the Gulf of Mexico due to Hurricane Barry largely explains last week’s huge decline in US commercial crude stocks. However, although these output outages will only be temporary, we still …
24th July 2019
Hurricane Barry clouds the picture Last week’s draw in commercial crude stocks can largely be put down to a drop in production in the Gulf of Mexico linked to Hurricane Barry, rather than stronger demand for crude. While the picture is blurred by the …
17th July 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
Mounting geopolitical tensions between the US and Iran have prompted fears of a full-blown military war in the Gulf region. The most important impact would clearly be the loss of life. From the perspective of the energy market, if war were to break out, …
11th July 2019
OPEC is downbeat on prospects for 2020 OPEC sees demand for its oil falling in 2020 as non-OPEC producers take market share owing to its policy of output restraint. It forecasts that growth in global demand will be unchanged next year, whereas we expect …
Philadelphia refinery shutdown seems to have had little effect on stocks Although the main cause of last week’s sharp fall in commercial crude oil stocks is not clear, it does seem that the recent shutdown of the Philadelphia Energy Solution’s refinery …
10th July 2019
Oil & Gasoline – Oil prices rose a little in June on a combination of escalating US-Iran tensions, signs of a truce in the US-China trade war and the expectation that OPEC+ would extend its production cuts. However, prices have already eased back. In our …
4th July 2019
The jump in net imports is unlikely to continue A surge in net imports meant that commercial crude oil stocks fell by less-than-expected last week. We expect stocks to continue to drop in the weeks ahead in line with the seasonal uptick in gasoline demand …
3rd July 2019
OPEC+ has agreed to rollover its current output quotas for nine months, but weak demand means that we still expect the market to move into a surplus and oil prices to fall by end-2019 . To recap, OPEC and its allies, primarily Russia, today officially …
2nd July 2019
We expect OPEC+ to reaffirm its current output quotas for another six months when it meets next week. The group is likely to justify the move by highlighting high stocks and subdued demand prospects, but the 18% plunge in prices between mid-May and early …
28th June 2019
Hefty stock drawdowns are more about supply than demand We think last week’s unexpectedly large decline in US crude stocks can be explained more by the fall in OPEC production than by surging domestic demand. That said, we do not think that the latest …
26th June 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
After a recent run of large builds, last week’s drawdowns in US stocks of both commercial crude and gasoline point to an improvement in US oil demand. But with stocks still relatively high, we think OPEC+ is likely to rollover current production cuts at …
19th June 2019
OPEC highlighted risks to demand and high stocks in its latest report which, coupled with lower prices, suggest that there will be little appetite for increasing production when the group meets later this month. … OPEC Monthly Oil Market Report …
13th June 2019
US crude stocks continued to rise this week, despite the increase in the refinery utilisation rate, a fall in net imports and lower production. This put further downward pressure on prices, which had already fallen sharply earlier today. Nevertheless, we …
12th June 2019
We have now incorporated an escalation in the US-China trade war into our global economic forecasts. As it happens, we think that the negative impact on global GDP growth will be relatively contained, so it has not led to a major downward revision to our …
10th June 2019
Caught up in the broader sell-off in risky assets triggered by the latest escalation in trade tensions, oil prices have plunged in recent weeks, and the prices of most other energy commodities have fared almost as badly. We suspect that the latest fall in …
6th June 2019
Stocks of both crude and products jumped in the latest weekly data, despite slightly stronger refinery run rates. The apparent weakness of US demand and higher stocks will make it difficult for OPEC+ to decide to increase supply at its upcoming bi-annual …
5th June 2019
The relative scarcity of Brent crude and an abundance of WTI have led to a persistently wide price spread between the two oils. However, we expect enhanced pipeline capacity in the US and somewhat higher OPEC output to narrow the spread later this year. … …
31st May 2019
After a number of surprising builds in US commercial crude stocks, last week’s small drawdown perhaps signals that a summer fall in stocks may be looming. If we are right, and stocks continue to decline, this could make the case for OPEC to roll over …
30th May 2019
US commercial crude stocks rose again this week partly due to a release from the Strategic Petroleum Reserves (SPR), which caused prices to drop sharply today. Despite this, we still think that crude stocks will fall over the next few months owing to a …
22nd May 2019
The recent problem of oil contamination in Russia presents an upside risk to our oil price forecast in the short-term. If this develops into a longer-term theme, it could pose a serious risk to European oil security. In this Energy Watch , we discuss …
21st May 2019
Market moves in the wake of this weekend’s Joint Ministerial Monitoring Committee (JMMC) meeting suggest that some investors expect OPEC to roll over output cuts when they expire in June. In contrast, we think that developments over the next month could, …
20th May 2019
China’s decision to raise its tariff on US LNG imports from 10% to 25% from 1st June effectively rules the US out of the world’s second-largest, and fastest-growing, market. It will also weigh on spot LNG prices in the future as the US will need to find …
16th May 2019
US crude stocks returned to their recent run of unseasonal builds last week. This was despite the refinery utilisation rate, net imports and production all implying a drawdown. That said, there is rarely a simple arithmetic read-across from these factors …
15th May 2019
Following the recent escalation of US sanctions on Iran’s crude exports, attention has been focused on OPEC’s next move. An upward revision to global demand for OPEC crude could give some members license to increase output in the coming months to ensure …
14th May 2019
The price of oil rose a little last month owing in part to supply concerns regarding the US decision to end sanction waivers on Iran’s oil exports. We now expect Iran’s output to fall further and have slightly raised our oil price forecasts. However, we …
9th May 2019
After US crude stocks reached their highest since September 2017, the beginning of May saw a partial reversal in recent builds. The latest stock draw was fuelled by a fall in net imports and an extended refinery maintenance period ahead of new IMO marine …
8th May 2019
A drop in refining activity and a further increase in net imports saw a third consecutive weekly build in crude stocks, which are now at the highest since September 2017. An unexpected drawdown in the Strategic Petroleum Reserve (SPR) points to possible …
1st May 2019
US natural gas stocks have remained stubbornly low in recent years. We think that this reflects a new norm in the natural gas market which is eroding the impact of stock levels on prices. … Why lower US natural gas stocks are here to …
A stabilisation of economic growth in China should support the price of Pacific coal in 2019, but in the longer term we expect prices to slide as demand softens and supply increases. … Hard to be positive on Pacific …
29th April 2019
Our forecast of sluggish global growth, further increases in US output and a rise in investor risk aversion suggests that the recent rally in oil prices will prove short-lived. In contrast, we think that demand for natural gas and LNG will defy the …
26th April 2019
A surge in net imports and the recovery in domestic production led crude stocks higher last week. However, we expect stocks to start to be drawn down in the coming weeks as the refinery maintenance comes to an end. … US Weekly Petroleum Status …
24th April 2019
We retain our long-held view that the price of oil will fall this year owing to weak global growth, further gains in US oil output and a rise in investor risk aversion. However, the scale of recent supply disruption has been greater than we anticipated. …
23rd April 2019
The collapse in US net imports drove crude oil stocks lower last week. We expect further slides in crude stocks as the maintenance season for refineries ends. … US Weekly Petroleum Status …
17th April 2019
The decline in net imports was one reason why US crude stocks surged again this week. However, we don’t think that this trend will continue as we expect the maintenance season for refineries to end soon. … US Weekly Petroleum Status …
10th April 2019
As a group, OPEC is more than complying with its production quota, which helps to explain the recent rally in prices. That said, individual country compliance is quite poor with Saudi Arabia shouldering the brunt of the cuts. At the same time, the group …
Most of the excess supply in the oil market has now disappeared as a result of the voluntary and involuntary output cuts, notably by OPEC member states. However, we expect higher prices to encourage an upturn in supply later in the year, at a time of only …
9th April 2019
The recent plunge in the spot price of Asia liquefied natural gas (LNG) in part reflects warmer-than average winter temperatures, but there is a more structural problem in the form of excess supply. We think this will mean that the average annual LNG …
5th April 2019
Jumps in net imports and US production meant that US crude stocks showed a stellar build this week. However, we expect that stocks will fall in the months ahead as refineries come back online. … US Weekly Petroleum Status …
3rd April 2019
Oil prices saw their strongest quarterly gain in almost ten years in Q1 2019. However, we expect that this recent upturn will begin to subside and that the fundamentals of elevated US supply and subdued global demand should send prices lower by end-2019. …
2nd April 2019
We estimate that strategic petroleum reserves (SPRs) in India and China are at record highs and will continue to increase in the years ahead. In contrast, we think that US reserves will slide gradually in the coming years, and as a result, the net impact …
29th March 2019
The spike in oil prices in 2018 followed a similar pattern to the spike in 2012. As such, the price trend in 2012-13 can perhaps tell us something about the likely direction of prices this year. To be clear, our forecast of lower oil prices by end-2019 is …
28th March 2019
US crude stocks rose this week as the refinery rate ticked down and net imports picked up. We don’t think that this trend will continue as we believe that OPEC exports to the US will continue to fall. … US Weekly Petroleum Status …
27th March 2019
The guiding principle behind OPEC’s recent production cuts is to reduce global oil stocks and to put prices on a firmer footing. In the near term, stocks may decline given that OPEC is now producing considerably less than its quota. But our forecast of …
22nd March 2019
US stocks slumped again. The drivers were an increase in the refinery rate and a huge jump in exports. What’s more, this occurred despite production rising. We expect that as refineries come out of maintenance and as OPEC exports drop, crude stocks will …
20th March 2019