Filtered by Subscriptions: Energy Use setting Energy
One of the latest casualties of heightened China-Australia geopolitical tensions is Australian coal exports. But we think that this will have limited implications for demand and prices as, for the most part, coal should be re-directed to other countries . …
22nd December 2020
We expect the unusually large discount in natural gas prices in Europe relative to those in Asia to shrink in the year ahead as the recovery in European demand gathers pace . The price of Asia LNG (JKM) recently breached $10 per mBtu; a level not seen …
18th December 2020
Stocks dip, but are likely to remain inflated for some time US crude stocks declined in the latest data as net imports plummeted. But refinery activity remains subdued and the latest virus-related restrictions could see lower product demand in the coming …
16th December 2020
Weaker oil demand forecast could lead to lower OPEC+ supply in Q1 OPEC cut its 2021 oil demand forecast in its latest report, which we suspect could delay further easing of its production cuts early next year. This should help put a floor under prices . …
14th December 2020
The substitution of coal for natural gas in European power generation has reversed in recent months, but we doubt that this marks the start of a new trend. Instead, we think that gas-based power in Europe will become increasingly price competitive in the …
11th December 2020
We forecast that a substantial pick-up in oil demand in the second half of next year amidst a backdrop of constrained supply will push Brent oil prices to around $60 per barrel by end-2021. That said, there are clear downside risks, the most notable being …
10th December 2020
US crude stocks to remain elevated for a little while yet The huge counter-seasonal build in US commercial crude stocks last week was driven by a surge in net imports. We expect that it will take some time before stocks fall back to more “normal” levels . …
9th December 2020
We think that OPEC+ production will rise by less than the new agreement allows. Some countries will make compensatory cuts, while weak Q1 demand could prevent monthly rises in February and March . Last Friday, OPEC+ announced that would increase output by …
7th December 2020
Overview – The prospect of effective COVID-19 vaccines gave a lift to most energy commodities in November as they have raised the prospect of higher demand in 2021. We anticipate a particularly strong rebound in oil consumption next year and have raised …
4th December 2020
Implied product demand unlikely to make significant turnaround until March Crude stocks dipped last week as net imports sank. Meanwhile, with COVID-19-related restrictions now present in a number of large states, we suspect that demand will remain low for …
2nd December 2020
We expect OPEC+ to extend its current 7.7m bpd supply cuts for at least another three months at its next meeting. Although prices have rallied in recent weeks on hopes of a faster recovery in demand, output restraint will still be needed to avoid …
27th November 2020
With widespread vaccination against COVID-19 now increasingly likely, we are revising up our oil demand forecasts for next year. And while OPEC+ will probably raise output a little faster in response, we still think that the oil market will remain in a …
Demand to remain subdued … for now US commercial crude stocks fell slightly last week, while implied product demand also ticked down. And, with new US virus cases still at very high levels, we think that it probably won’t be until next year – once …
25th November 2020
The recovery in oil demand across Emerging Asia has been highly uneven. Oil consumption in China is already back to pre-virus levels, and we think it will rise further in the year ahead. But consumption elsewhere is unlikely to return to pre-virus levels …
19th November 2020
Risks to demand skewed to downside in the weeks ahead Crude stocks rose last week as rebounding output offset increased refinery activity. Meanwhile, with new US virus cases continuing to rise, we suspect that the risks to demand are now firmly to the …
18th November 2020
The partial recovery in oil prices points to a rise in the number of rigs drilling for oil However, the relationship between rigs and oil production is less clear cut In addition, changes in rigs take longer to translate into changes in output in the US …
17th November 2020
Chunky rise in stocks highlights the headwinds still facing prices The rise in US commercial crude stocks last week is a stark reminder that, despite the recent optimism surrounding a potential COVID-19 vaccine, the recovery in oil prices still has a long …
12th November 2020
Progress on a vaccine could lead OPEC to push up its 2021 demand forecasts OPEC’s oil production jumped in October as Libyan output surged. But we expect that OPEC and its allies will extend their current level of supply cuts into early 2021, which will …
11th November 2020
News of a vaccine sent oil prices surging on Monday on the back of expectations that this will enable demand to recover more quickly than previously thought. But higher prices also increase the chances of a faster return of supply, particularly from …
New national lockdowns in Europe have led us to revise down our oil demand forecasts for Q4. But the decline is likely to be much smaller than in Q2, not least because the economic hit will be less severe . European oil demand slumped in early 2020, as …
6th November 2020
The apparent failure of the Democratic Party to win a ‘clean sweep’ in this week’s US election means that many of the policy initiatives and spending proposals made by presidential hopeful, Joe Biden, during his campaign are likely to be – at best – …
Despite a small revival in thermal coal prices ahead of winter in the Northern Hemisphere, we doubt it will be long before they start to test historic lows again. And if, as we expect, the COVID-19 pandemic serves to accelerate the push towards …
5th November 2020
Large fall in stocks unlikely to be repeated in coming weeks The plunge in US commercial stocks largely reflects a hurricane-related drop in output, rather than strong demand. And with virus cases rising, demand should remain subdued in the coming weeks . …
4th November 2020
We think that energy commodities will claw back a bit of the ground that they have lost relative to industrial metals over the next two years or so, as some cyclical factors linked to COVID-19 which have weighed more heavily on the former unwind. However, …
3rd November 2020
We suspect that the rapid recovery in Asia LNG prices will run out of road in the coming months, as supply returns and LNG cargoes are potentially diverted away from Europe . Asia LNG prices plummeted earlier this year as the plunge in economic activity …
Commodity prices have largely shrugged off the conclusion of China’s Fifth Plenum and discussion of the 14 th Five-Year Plan (FYP). This is not so surprising as the main takeaway from the event is that we will have to wait until March for any detail. But …
30th October 2020
A victory for the Democratic party in November’s presidential election has several potential implications for commodity markets . Very broadly, Joe Biden’s pledge to actively promote decarbonisation of the economy should accelerate the move away from …
Overview – Energy demand and prices have continued to recover from their virus-induced lows, but they remain depressed. However, we expect the revival in energy demand to pick up pace in 2021 as developed economies phase out virus-containment measures and …
28th October 2020
Product demand likely to remain subdued The weekly surge in US commercial stocks largely reflects a return to more normal levels of crude production, after Hurricane Delta forced rigs to close. However, the product data point to stagnating demand amid the …
Production should bounce back US commercial crude stocks declined as Hurricane Delta dealt a further blow to output. And though production should revive to pre-hurricane levels, gains will probably be smaller in the months thereafter . The EIA’s weekly US …
21st October 2020
Hurricane-induced slump in production to prove short lived The suspension of production in the Gulf of Mexico ahead of Hurricane Delta largely explains the decline in US crude stocks last week. But most of this production has already been restarted and …
15th October 2020
OPEC production to remain low, even as Libya comes back on stream OPEC’s oil production fell in September and, except for Libya, we expect output by individual member states to either stabilise or decline a touch in the coming months as prices remain weak …
13th October 2020
In this Focus , we argue that the medium-term impact of the COVID-19 pandemic on both global economic growth and consumer behaviour has brought forward “peak oil demand” to around 2030 . As a result, we expect that real oil prices will be falling for much …
8th October 2020
Hurricane Delta to weigh on stocks next week US commercial crude stocks rose a little as net imports jumped in combination with a revival in domestic production. But with another hurricane on the way, we expect output to dip back next week . The EIA’s …
7th October 2020
Overview – Some energy commodities such as natural gas and coal benefitted from a seasonal uplift in demand in September, but oil prices fell. We think that oil and natural gas prices will make a little more ground this year, provided that demand …
6th October 2020
Recovery in refinery throughput to weigh on stocks in the coming months US commercial crude stocks fell a touch as exports rose. And despite implied product demand dropping back, a revival in refinery activity is likely to act as a drag on crude stocks in …
30th September 2020
Although WTI crude oil prices have partially rebounded from their second-quarter nadir, oil production in the US has yet to recover. We suspect that low prices and producers struggling to source financing will mean that US oil output won’t recover to …
29th September 2020
It’s a bumpy road, but demand is recovering US commercial crude stocks dipped as net imports eased back and production edged lower. Product stocks also fell, in part due to lower refinery activity but also as a result of a tick-up in implied demand . …
23rd September 2020
Persistently weak demand could force an extension of OPEC production cuts OPEC’s oil production rose sharply in August on the back of higher output quotas. However, if concerns persist about global oil demand, which was discussed at length at yesterday’s …
18th September 2020
Hurricanes continue to distort the US crude demand picture The restart of refineries following Hurricane Laura explains last week’s fall in crude stocks. With another hurricane on its way, it will be some time before a clear picture emerges of the state …
16th September 2020
Gasoline demand to face downward pressure in the weeks ahead US crude stocks snapped a six-week falling streak to increase last week as refinery activity fell. And as seasonal factors weigh, we expect gasoline demand to make little further headway this …
10th September 2020
Brent’s recent price drop to a two-month low shows the fragile nature of its price recovery. We think that an uneven recovery in demand, combined with the hangover of vast oil stocks accumulated in the first half of this year, will limit any price gains, …
8th September 2020
Overview – Energy prices continued to recover in August, but they are still trailing other commodity asset classes as well as other risky assets, such as US equities. We expect that prices for the most part will hold steady for the rest of this year given …
3rd September 2020
Hurricane disruption to linger and weigh on crude stocks a little next week US crude stocks dropped sharply last week as US production collapsed by over 1m bpd. And though supply is bouncing back, we expect further drawdowns next week as output remains …
2nd September 2020
Global oil supply fell to a multi-year low in the second quarter, and recent data point to output having fallen further in the third quarter. With demand reviving, we think the oil market is now in a deficit, which – assuming there is no ‘second wave’ of …
28th August 2020
Hurricane Laura to weigh heavily on crude stocks next week US crude stocks dropped again last week owing primarily to a collapse in net imports. Stocks should decline next week too since Hurricane Laura has forced most production in the Gulf of Mexico …
26th August 2020
A recovery in demand at a time of constrained supply will put downward pressure on US natural gas stocks and provide a small lift to prices in 2021 . The price of US natural gas (Henry Hub) touched a multi-decade low of $1.48 per mBtu in June owing …
25th August 2020
In our view, the scale of energy demand destruction caused by the coronavirus pandemic has made the liberalisation of the global LNG market start to look inevitable . While pressure has been mounting on suppliers to offer more flexibility for some time, …
21st August 2020
A combination of stronger demand and higher oil prices will support the spot price of Asian LNG over the next year and a half . At the start of the year, the LNG market was already showing signs of oversupply and the virus-related hit to demand made …
20th August 2020
Moderating product demand unlikely to derail future stock drawdowns US crude stocks declined for the fourth week in a row, although by less than the market expected. We expect that total crude stocks will continue to head towards their five-year average …
19th August 2020