Oil sector woes will hold back the recovery Whether negative or not, oil prices are now far below operating breakeven costs for many oil sands projects. That means firms are slashing production, and we doubt this lost output will be quick to... 21st April 2020 · 3 mins read
Commodities Update WTI tumbles below zero as the oil storage runs out 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... 21st April 2020 · 3 mins read
Middle East & North Africa Economics Update Gulf to rely on austerity rather than devaluations The collapse in oil prices has led to renewed pressure on dollar pegs in the Gulf and, while there could be some positive effects on balance sheets from devaluations, the costs would be politically... 21st April 2020 · 3 mins read
Precious Metals Update Not much road left for gold The gold price has benefitted lately from demand for “safe” assets and an apparent easing of deflationary fears. While we also doubt that an extended period of deflation is on the cards, runaway... 17th April 2020 · 3 mins read
Energy Update SPR buying to have limited impact on oil prices 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. 17th April 2020 · 2 mins read
OPEC Watch OPEC Monthly Oil Market Report (Apr.) 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... 16th April 2020 · 3 mins read
Metals Focus A deep dive on supply in the context of COVID-19 It is now crystal clear that virus containment measures will deal an unrivalled blow to metals demand. But the extent to which these same measures may also hit supply is up for debate. Despite all the... 16th April 2020 · 12 mins read
Energy Data Response US Weekly Petroleum Status Report 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 OPEC+ deal... 15th April 2020 · 2 mins read
Middle East & North Africa Economics Update Oil output cuts mean Gulf slump to be even deeper The deal struck by OPEC and other oil producers to cut oil output sharply over the coming months will help to put a floor under oil prices, but the reduction in output simply adds to the reasons to... 14th April 2020 · 3 mins read
Commodities Update Record output cut provides scant relief for now 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... 14th April 2020 · 3 mins read
Commodities Update China commodity trade not out of the woods yet After collapsing in January and February, China’s commodity exports stabilised last month. But with economic activity outside China now in the doldrums, this is unlikely to last. Meanwhile, China’s... 14th April 2020 · 2 mins read
Precious Metals Update Gold jewellery demand takes a pounding The latest trade data show sharp contractions in gold imports by major consumers China and India, suggesting that gold jewellery demand has taken a battering. Until signs emerge that the spread of... 9th April 2020 · 3 mins read
Commodities Weekly Prices hang on the outcome of the OPEC+ meeting Despite the apparent conviction of US President Trump, much uncertainty remains over whether Saudi Arabia and Russia will manage to strike a deal in today’s OPEC+ meeting. Our best guess is that the... 9th April 2020 · 8 mins read
Energy Update What to expect from the OPEC+ Meeting 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... 8th April 2020 · 3 mins read
Asset Allocation Update Energy commodities unlikely to outperform equities Although energy commodities have substantially underperformed global equities in recent months, we think that the returns from both will be broadly similar over the remainder of 2020 if, as we expect... 8th April 2020 · 4 mins read
Energy Data Response US Weekly Petroleum Status Report The latest US weekly data clearly showed the negative impact on oil demand of measures to contain the coronavirus. Further stock builds are likely in the near term, despite falling domestic production... 8th April 2020 · 2 mins read
