Filtered by Subscriptions: Energy Use setting Energy
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
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
More declines in store for commercial crude oil stocks Oil prices were little swayed by the latest EIA data showing the biggest decline in commercial crude stocks in about three months last week, given that the data were similar to industry data released …
16th 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 …
OPEC supply drops but further falls to come OPEC’s monthly report for October showed a sharp drop in the group’s production, and further falls are likely if members are to abide by their new quotas from November. The OPEC Monthly Oil Market Report for …
14th November 2022
Oil demand defies high prices and slowing economy, for now Commercial crude stocks rose this week even though more crude was used by refiners. And despite the increase in refining output, gasoline and distillate stocks fell on strong demand. We think …
9th 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
Demand remains resilient to high prices and slowing economy, for now Last week’s fall in commercial and strategic crude stocks dragged total reserves to their lowest level since November 2001, contributing to a rise in prices today. Gasoline and …
2nd November 2022
Overview – Despite the onset of a global recession, we think that energy prices will remain historically high in 2023 owing to severe supply constraints. The next round of EU sanctions on Russia’s oil and product exports, coupled with the output quota cut …
31st October 2022
The outlook for commodity prices has rarely felt more complex: while a looming global recession is set to drag on demand, the ongoing war in Ukraine is likely to mean some markets will remain jumpy over supply concerns. What will this all mean for prices …
Commercial stocks rise despite record exports US commercial crude stocks rose last week, as drawdowns from the Strategic Petroleum Reserve boosted commercial stocks. But the big news was that crude exports rose to a record high, probably encouraged by …
26th October 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
SPR releases look set to continue in the coming months US commercial crude stocks fell last week, but distillate stocks rose slightly as high US prices probably took away some of the incentive to export. All eyes will be on today’s announcement by the US …
19th October 2022
Bleak global economic backdrop casts a large shadow over the outlook for oil demand Global oil demand has been relatively income inelastic in the recent past We have pencilled in a stagnation in oil demand over the next year In this Energy Watch , we …
Pressure on refineries is still evident There was a large rise in US commercial crude stocks last week, but product stocks declined, as demand held steady while refinery throughput dropped. That combination, mixed with uncertainty around French …
13th October 2022
We have lowered our estimate of global oil supply in 2023 after OPEC+’s announcement that it would cut production quotas from November. As a result, we no longer expect the oil market to be in a surplus, and we forecast that the price of Brent will end …
12th October 2022
OPEC supply cuts from November may not last long OPEC’s latest report shows that the group still expects demand for its crude oil to increase next year. This bolsters our view that the countries cutting supply from November will eventually reverse course …
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
OPEC+ decision adds pressure on the US to increase SPR releases The fall in US commercial crude stocks last week is just one factor pushing the Brent crude price over $93 today, with the other being the decision by OPEC+ to cut its output quota by 2m …
5th October 2022
Having prepped the market well beforehand, OPEC+ announced a 2mn bpd cut to its production quota from November. Of course, given that the group has been producing significantly below its quota, the decline in physical supply will be much less, though …
OPEC+ may announce a major cut to oil production quotas tomorrow. But with the current quota not being met, the actual hit to oil supply will be much smaller. We estimate that a 1m-barrel-per-day (bpd) cut to quotas would translate into a 350,000 bpd …
4th 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
Rebound in implied demand likely to prove short-lived US commercial crude stocks fell slightly for the first time in four weeks, while product stocks decreased much further. The latter was mostly owing to the sharp increase in product demand. But we doubt …
28th September 2022
High export demand is boosting refinery activity US commercial stocks rose for the third successive week in part due to a bounce back in imports, but also subdued domestic demand. The backdrop of rising interest rates and still-high prices suggest that …
21st September 2022
Overview – Energy prices have been falling recently as concerns about weaker demand took centre-stage, but we expect constrained supply to put a floor under prices in the coming months. By contrast, we expect industrial metals prices to fall further given …
14th September 2022
US demand to remain subdued for some time yet US commercial stocks rose, despite a fall in net imports and a rise in refinery activity. Although export demand remains strong, domestic demand is weak, probably reflecting falling real incomes. The EIA’s …
OPEC expects to have to raise supply in 2023 OPEC’s latest report shows that most producers raised oil output in August, but the gap between targeted production and actual production widened. OPEC also looks optimistic on oil demand to us, which might …
13th 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
Commercial stocks will remain low for some time US commercial crude oil stocks rose last week for the first time in four weeks, as imports increased while exports and refinery usage fell. But stocks will probably continue to remain at still-low levels for …
8th 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 …
OPEC+ announced a 100,000-barrel per day cut to production in October at its regular monthly meeting today. The cut is not a complete surprise as there have been mutterings for a few weeks, notably from the Saudi energy minister, Abdulaziz bin Salman al …
5th September 2022
Commercial stocks could have further to fall US commercial crude oil stocks fell last week for the third week running, despite another release from strategic reserves. We think commercial stocks will remain under pressure over the coming weeks, …
31st August 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 …
Demand indicators remain volatile, but point to some softness US commercial crude stocks fell again this week, despite a chunky release from the strategic reserve. Elsewhere, there was a large weekly decline in implied product demand. It appears that the …
24th 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 …
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 …
Signs of stronger demand failing to lift prices The large fall in US commercial crude stocks was mostly due to a renewed rise in exports. Implied gasoline demand rose for a second consecutive week, but this failed to lift prices amid growing concerns over …
17th August 2022
More of the same OPEC’s monthly report for August showed that the group continues to produce significantly less than its quota and we expect this trend to continue in the coming months. OPEC is clearly worried about demand due to the economic slowdown, …
11th August 2022
Lower prices are boosting gasoline demand The rise in US crude stocks was in large part down to a drop in exports. More interesting was the jump in implied gasoline consumption, which probably reflects the recent fall in prices. This may not be …
10th August 2022
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