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It was another week of soaring natural gas prices as LNG demand from Asia appears to have picked up and the energy crisis in Europe deepens by the day . Ultra-dry and hot weather across Europe is creating problems with Norway’s hydropower and France’s …
19th August 2022
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
This week the prices of most commodities got a boost as investors pared back expectations for rate hikes in the US , following lower than expected inflation data. That said, we still expect a further small rise in the US 10-year Treasury yield by the end …
12th 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
Deteriorating global economic growth over the coming quarters will weigh on industrial demand for cotton, natural rubber and lumber. That said, high oil prices will offer some support to cotton and natural rubber prices, and our expectation for rate cuts …
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
Commodity import volumes remained lacklustre in July , consistent with subdued activity in heavy industry and construction. We think import growth should tick up in the coming months in response to higher infrastructure spending and a modest pick-up in …
8th August 2022
Concerns about the demand outlook have dragged the Brent crude oil price towards $90 per barrel this week. But, the supply-side concerns which pushed the price over $120 per barrel not too long ago haven’t entirely vanished. Indeed, following the OPEC+ …
5th August 2022
In a week of relative financial market calm, there was a pause in the large, sentiment-driven swings that have characterised most commodity prices in recent weeks . Instead, prices seemed to take direction from more fundamental drivers. That said, the …
Commercial stocks rise, but scope for further increases is limited Crude oil prices have been for a rollercoaster ride today, rising by $3 per barrel following the OPEC+ meeting, and then more than erasing those gains later on. Prices fell particularly …
3rd August 2022
Having fallen sharply in Q2, we think that the gold price is now close to a cyclical trough. What’s more, the price should revive a little in 2023 as markets factor in the prospect of US monetary tightening . We always expected the price of gold to fall …
China’s PMIs fell in July, weighed down by soft export orders. However, we think that China’s economy troughed in H1 2022, and that a modest pick-up in H2 should give some support to commodities prices . China’s official and Caixin manufacturing PMIs …
1st August 2022
The prices of most commodities across energy, metals and agriculturals rose this week. The common driver was investors dialling back their expectations of the aggressiveness of US monetary policy tightening , after data showed GDP contracted for a second …
29th July 2022
Overview – While non-energy commodities prices may fall a little further, we think the big move down in those prices is now behind us. Admittedly, the demand outlook has undeniably deteriorated in recent months, but many of the supply risks that prompted …
28th July 2022
Rising exports are becoming increasingly controversial There were large increases in both crude and product exports in the latest data, which will add fuel to lobbyists’ calls for restrictions on exports while prices are high . The EIA’s weekly US …
27th July 2022
The news today that Gazprom will further reduce its natural gas supply to Europe increases the likelihood of recessions in the euro-zone, UK and parts of Emerging Europe. It also supports our view that inflation pressures will be relatively persistent in …
26th July 2022
It was a more positive week for prices, in large part owing to some softness in the US dollar . Otherwise, the news was not particularly positive for prices given the ECB’s surprise decision to hike its policy rate by 50bp (having signalled 25bp), …
22nd July 2022
Production to remain sluggish this year Global steel production growth slowed in June as higher power costs in advanced economies contributed to lower output there. By contrast, the decline in China’s output slowed slightly. Overall, we expect global …
US commercial crude oil stocks looking fragile US commercial stocks fell last week, largely on the back of a rise in exports and a drop in imports. The fall came despite another bumper release from the strategic reserve. As those government stock …
20th July 2022
Supply growth to remain muted Global aluminium production ticked up again in June, but the increase was not sufficient to explain the plunge in prices last month. Base effects will mean that China’s production growth will accelerate in the second half of …
Although we doubt that they will fare quite as badly as they have in recent weeks, we still expect the energy and materials sectors of global stock markets to underperform over the next couple of years. Worries that high inflation, and the large interest …
19th July 2022
Europe’s heightened demand for LNG will be enough to keep prices high this year and into 2023, particularly as LNG supply growth will be fairly limited . The Asia-based spot price for LNG, together with its European counterpart (TTF), soared in the wake …
18th July 2022
Most commodity prices fell this week as global monetary tightening and fears about economic growth intensified . The high June inflation reading in the US nails on another large rate hike at the FOMC’s meeting in July. And central banks in Canada and …
15th July 2022
As metals prices soared early in the year, we cautioned that they would end the year lower owing to soft demand growth. Prices have since plunged. Now, we think they may have a little further to fall, before finding a floor as China’s demand moves up a …
Clear signs that high prices are weighing on demand Total crude stocks fell again, mainly due to ongoing sales from the strategic reserve. That said, the big news was hefty builds in petroleum product stocks, suggesting that high prices are finally …
13th July 2022
Commodity import volumes were generally weak in June . We think some of this reflects the lingering impact of lockdowns on demand, but it also points to subdued activity in heavy industry and construction. June may prove to be a low point for commodity …
OPEC looking more likely to scrap quotas from September OPEC unveiled its oil market forecasts for 2023 in its monthly report today. OPEC is more bullish than us on demand, forecasting an increase of 2.7m barrels per day. But even though it is also quite …
12th July 2022
After a period of extreme volatility, we expect the price of US natural gas to edge higher in the remainder of this year. Together, a rise in LNG exports and a pick-up in US consumption this winter will keep stocks low by past standards and underpin a …
11th July 2022
There was no clear direction in commodity prices this week, even within the same types of commodities. The takeaway is that commodity prices were dancing to their own tunes . Take energy, for example. Natural gas and coal prices rose on fears that Russia …
8th July 2022
US petroleum product demand to be seasonably soft US commercial crude stocks rose owing to a fall in net exports and lower inputs to refineries. For now, implied product demand remains in line with its seasonal norm, but we expect demand to be soft for …
7th July 2022
Overview – Non-energy commodities prices generally fell in June on the back of concerns about the outlook for demand amid global monetary tightening and slower economic growth. Energy prices may also fall a little from here, but constrained supply will …
6th July 2022
Prices struggled to find direction this week as concerns about demand deepened at a time of still constrained supply of many commodities . The price of Brent crude fell sharply on Thursday in response to US real spending data for May, which were weaker …
1st July 2022
We think that the recovery in China’s PMIs in June was driven by the lifting of virus-related restrictions rather than an improvement in underlying economic conditions. Accordingly, we think that softer growth in China’s activity will continue to weigh on …
We expect that the prices of agricultural commodities will fall back gradually over this year and next, but remain historically high. However, the volatility of prices in recent months and the uncertainty of the current environment mean there are major …
30th June 2022
Refinery constraints to put a floor under commercial crude oil stocks Commercial crude stocks fell last week as refineries raised production of petroleum products. However, refineries will probably struggle to raise output much further, with many of them …
29th June 2022
The G7 proposal to impose a cap on the price of Russian oil and gas would introduce new supply-side risks by potentially disrupting Russian energy supplies. This could push global energy prices up further, but for now we still see Brent crude prices …
28th June 2022
We think the prices of agricultural commodities will fall back in the coming months, but most will remain historically high owing to tight supply, concerns about future supply and high energy prices. Consumer food price inflation has been soaring in …
24th June 2022
Most commodity prices fell this week as demand concerns picked up due to ongoing monetary policy tightening by major central banks . Speaking to the US Senate Banking Committee on Wednesday, Federal Reserve Chair Jerome Powell underlined his “strong …
Whilst OPEC+ has been failing to meet its production quotas in recent months, it will technically finish unwinding its pandemic-related supply cuts come September. We think OPEC+ will then move to a more liberal approach and allow the few members with …
23rd June 2022
Steel production to remain lacklustre in 2022 Global steel production continued to pick up in May, led by higher output in India and China, which more than offset the ongoing decline in Europe’s production. The rise in input costs, efforts to curb carbon …
22nd June 2022
A threatened strike at Chile’s copper giant, Codelco, could knock as much as 0.3%-pts off quarterly GDP growth for every week that workers are on strike and worsen the country’s balance of payments strains. What’s more, it may not even be enough to give a …
21st June 2022
Supply is picking up, just as prices fall Global aluminium production has increased steadily since the start of the year in large part owing to a rebound in China’s output. At the same time, demand is relatively subdued, which suggests that aluminium …
20th June 2022
European natural gas prices surged this week on renewed supply concerns, as Russia once again cut gas supplies to Europe and the US Freeport LNG export facility closed for six months . The huge price move emphasises how volatile natural gas prices can be …
17th June 2022
Russia’s decision to once again cut supplies to Europe makes the region’s gas supply look increasingly precarious. The move will slow regional stock builds and keep prices historically high . Russia’s monopoly gas exporter, Gazprom, announced on Wednesday …
16th June 2022
Robust Chinese refined metal output, alongside subdued domestic demand, has combined with constrained refined output elsewhere to provide greater export opportunities for China. But there are limits on the extent to which Chinese metal can fill the …
High prices keeping a lid on demand Commercial crude stocks rose again this week, following another unusually large release from the strategic reserve. Meanwhile, implied product demand fell back as petroleum product prices remain very high. We’re …
15th June 2022
The closure of the Freeport LNG facility in the US, for up to six months, adds to concerns about Europe’s ability to fill its gas storage tanks ahead of winter. We always suspected that supply concerns would re-emerge this year and, as a result, we …
OPEC still seems optimistic on Russia’s output this year The gap between OPEC-10’s quota and output widened further in May, which adds weight to our view that the group will fail to fully unwind its production cuts by year-end. What’s more, whilst OPEC …
14th June 2022
The supply risks associated with the war in Ukraine have not gone away, but there has been more market attention in recent weeks on the outlook for commodities demand. In the very near term, the lockdowns in China weighed on both energy and, to a lesser …
10th June 2022
