Filtered by Subscriptions: Energy Use setting Energy
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
Lower US output to add further downward pressure to crude stocks US crude stocks declined for their third straight week, although by less than in previous weeks. As demand continues to revive and US production treads water, we expect stocks to fall in the …
12th August 2020
Rising OPEC production to limit price gains OPEC production rose in July and the recent introduction of higher quotas means that output will almost certainly continue to increase in the coming months . The OPEC Monthly Oil Market Report (MOMR), released …
We think that it will take over a year for oil product consumption to recover to pre-virus levels. This in turn will limit crude oil demand for the next 18 months or so and any near-term price gains . Earlier this year, we thought that global crude oil …
11th August 2020
Weekly data for June and July point to a slight recovery in US crude oil production from May’s depressed level of 10m bpd. We expect output to remain subdued for the rest of 2020 . US crude oil production fell to 10m bpd in May, from 12m bpd in April, …
6th August 2020
Crude stocks to drop in the coming weeks US commercial crude stocks fell steeply again last week, in part because refinery activity is continuing to revive. We think that stocks will decline further in the coming weeks as product demand bounces back in …
5th August 2020
Product demand on the road to recovery A drop in net imports, combined with rising refinery throughput led to a huge fall in crude stocks last week. Although unlikely to be of the same magnitude, we suspect that stocks will continue to decline in the …
29th July 2020
Overview – The partial easing of coronavirus containment measures has allowed energy demand and prices to pick up from the lows recorded earlier this year. That said, we anticipate that the recovery in energy demand will be only gradual over the next …
In recent months, cargoes of US LNG have been cancelled in record numbers as countries around the world struggle with the virus-related economic slump. After exports surged by nearly 60% y/y in the first half of 2020, we expect their subsequent collapse …
24th July 2020
US production unlikely to rise much further An increase in crude oil production and a reduction in refinery throughput led to an increase in crude stocks last week. However, we think that stocks will fall back in the coming weeks as product demand picks …
22nd July 2020
Localised lockdowns will keep a lid on gasoline demand in coming weeks Crude stocks in commercial storage fell last week, though this was primarily a result of the collapse in net imports. Gasoline demand actually slipped back as some states moved to …
15th July 2020
OPEC to increase production quotas as it forecasts faster demand growth OPEC production continued to decline in June, largely due to a contraction in Saudi output. However, with OPEC becoming more optimistic on demand, we think that (new) higher quotas …
14th July 2020
The recent launch of the European Commission’s hydrogen strategy marks a step forward in the region’s decarbonisation push in which it hopes to use ‘green’ hydrogen in place of fossil fuels. We answer five key questions about hydrogen technology and …
10th July 2020
High import volumes unlikely to be sustained An unexpected surge in net imports pushed up US commercial crude stocks this week. But we think imports will fall back soon given the sharp drop in oil production outside the US in recent months . The EIA’s …
8th July 2020
Overview – Energy prices continued to recover in June, but they remain significantly lower than at the start of the year. What’s more, we do not expect them to recover to pre-virus levels until 2022 at the earliest. Supply will comfortably meet any rise …
7th July 2020
The end of the port blockade in Libya should mean that the country’s oil production is restored, but we think that supply will be slow to return not least because of damage to facilities and weak global demand. By way of background, the dramatic loss of …
3rd July 2020
US commercial crude stocks likely to fall further A fall in imports and another increase in refinery throughput meant that US commercial crude stocks plunged last week. We expect crude stocks to drop over the coming months as imports decline . The EIA’s …
1st July 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
In light of the recent revision to our China economic growth forecast and our expectation that the rebound in equities has further to run, we have revisited our oil price forecasts for the year ahead. We expect that constrained OPEC+ supply will not be …
25th June 2020
US commercial crude stocks will soon fall US commercial crude stocks rose again last week as some production came back online after being hit by Tropical Storm Cristobal. Nevertheless, we expect that stocks are nearing their peak as refinery activity …
24th June 2020
Gasoline demand in the US is recovering from the coronavirus-related slump. However, we think that it will take some time before consumption fully returns to its pre-virus level . By way of background, implied US gasoline demand was around 9m bpd in 2019. …
22nd June 2020
Our new coal switching price indicator (CSPI) shows that, in the UK and the Netherlands, power generation using natural gas is much more cost-effective than coal. While this has been true for a while, it has been entrenched by the recent virus-related …
18th June 2020
Relatively high rates of compliance unlikely to last May saw the latest OPEC production cuts come into force, with compliance among members fairly good. That said, a gradual pick-up in oil prices and demand, together with the prospect of some Libyan …
Nearing the peak in US commercial crude stocks Despite a hefty fall in US crude oil production, commercial crude stocks rose to another record high last week. Nevertheless, we expect crude stocks to start to fall over the coming weeks as refinery …
17th June 2020
The virus-related economic disruption has already dealt a huge blow to fossil fuel usage in European power generation. What’s more, we suspect that the transition towards renewables may be accelerated by post-virus policy support, which would have …
16th June 2020
US gasoline demand a relative bright spot in otherwise bleak market A jump in crude oil imports was the primary driver behind the rise in crude US stocks last week. And despite the continued revival in gasoline demand, product stocks crept higher. …
10th June 2020
As expected, OPEC+ extended its 9.7m bpd production cut for another month (until end-July) . Given that prices have rallied strongly in recent weeks, the group’s caution reflects the still-high level of uncertainty surrounding prospects for oil demand. …
8th June 2020
Overview – The gradual easing of coronavirus-related lockdown restrictions around the world, along with falling global production, has supported the price of oil recently. By contrast, persistent oversupply and lacklustre demand continue to weigh on coal …
5th June 2020
OPEC+ is expected to meet in the next few days. Despite reports of rifts amongst its members, we think that it will agree to extend its current 9.7m bpd production cut for at least another month . At the latest meeting in April, OPEC and its allies …
SPR buying only a temporary solution to oversupply US commercial crude stocks fell last week entirely because strategic crude stocks rose strongly. Nevertheless, falling imports and the ongoing rise in refinery activity suggest that the oversupply in the …
3rd June 2020
Coal prices should receive their usual seasonal uplift later this year. Nevertheless, we think that the average price of Newcastle coal will fall in 2020 and 2021 owing to weak demand and strong supply . The price of Newcastle (Pacific) coal has plummeted …
A hefty crude build, but gasoline demand picked up We think that the market is right to dismiss the latest chunky build in US crude stocks as it was largely driven by a rise in imports, which is likely to prove a one-off. Instead, a further fall in US …
28th May 2020
Quarantine measures associated with COVID-19 have seen geopolitical disputes, such as US-Iran tensions, seemingly fall under the radar of energy traders. That said, the national security law imposed on Hong Kong by China could re-escalate US-China trade …
Profitability and production at US shale firms has slumped owing to low oil prices We expect US oil output to remain low throughout the rest of 2020 … … but it could start to bounce back in 2021 Since the outbreak of the coronavirus, oil demand has …
21st May 2020
Stocks fall, but outlook remains bleak Last week, US commercial crude stocks fell for the second week running. Digging deeper, though, reveals that the rebound in gasoline demand – which has so far underpinned much of the growing market optimism – …
20th May 2020
In recent weeks, all three major natural gas benchmarks have traded at more-or-less the same price. Rather than a structural shift in the market, we think this probably reflects regional prices simply collapsing in unison amid the virus-related collapse …
18th May 2020
More promising signs for the US oil market US commercial crude stocks unexpectedly fell last week, adding to growing evidence that the US oil market has passed the worst. That said, a sustained recovery is not on the cards for some time yet. Indeed, the …
13th May 2020
A last hurrah for OPEC output OPEC production jumped up in April, but this will prove a one-off given the agreed output cuts from May onwards. We expect OPEC compliance with the cuts to be fairly good in the coming months as prevailing low prices and …
Low oil prices, OPEC+ production cuts and delays to investment should reduce global oil supply by over 6% this year. This is one reason why we expect prices to end the year higher . By way of background, global oil production rose to 100.5m bpd in 2019 …
11th May 2020
Slight reprieve for stricken US oil market Although US crude stocks climbed again last week, there are promising signs that the stress in the US oil market is beginning to ease. That said, a material turnaround in conditions remains some way off . The …
6th May 2020
Overview – The prices of most commodities struggled in April against a backdrop of moribund global demand. That said, the performance of energy commodities was mixed: while Brent crude and Henry Hub gas rose in price, the other energy commodities fell. We …
5th May 2020
Next week, the Texas Railroad Commission could mandate measures to curb oil production in Texas for the first time since the 1970s. However, even if they do decide to curtail output, we think that the impact on oil prices will be minimal, in part because …
30th April 2020
Builds in US commercial crude stocks to continue to slow US crude stocks rose again last week, but the pace of the builds is showing more signs of slowing. We expect stocks to continue to increase until the coronavirus-related quarantine measures are …
29th April 2020
Overview – The global spread of the coronavirus has dealt an extraordinary blow to energy demand, and – for as long as the containment measures remain in place – it is hard to see much upside for prices. However, once the lockdown measures are eased, the …
28th April 2020
OPEC’s allies recently agreed to cut output from May. While compliance with quotas is usually sub-par, we think that adherence to the quotas will be greater this time, in part because oil prices are so low . Earlier this month, OPEC+ agreed to cut oil …
24th April 2020
Mounting stocks come as little surprise US crude stocks jumped again last week, despite a small fall in production and a hefty drop in imports . Stocks are likely to continue to climb until the lockdowns are lifted, but the pace of increase may slow . The …
22nd April 2020
The spot price of WTI turned negative yesterday in large part owing to the nature of trading in the futures market. That said, the price slump has some fundamental underpinning as demand is very weak. We expect that storage constraints will keep the price …
21st April 2020
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
OPEC output surge will not last beyond May OPEC production surged in March after talks between OPEC and its allies broke down. While we expect output to remain relatively high in April, OPEC production should be much lower from May onwards following last …
16th April 2020
Crude stocks surge as refinery activity plummets to 12-year low US crude and product stocks soared again last week as the virus-related disruption continued to weigh on demand. We expect crude stocks to rise further in the coming weeks, but the recent …
15th April 2020