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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 …
14th September 2022
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
Energy markets took centre stage this week as demand concerns outweighed supply concerns, dragging prices down. Even the decision by OPEC+ on Monday to cut oil output quotas for October by 100,000 bpd failed to prevent the Brent crude oil price sliding …
9th 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 …
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 …
Commodity import volumes generally held up well in August, with the exception of crude oil imports. As long as China continues with pandemic-related lockdowns, oil demand is likely to remain weak. China’s export growth came off the boil in August, falling …
7th September 2022
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
Growing fears about demand hit all commodity groups hard this week as China tightened restrictions in response to renewed virus outbreaks. Energy prices took a big leg down from their highs reached last week , particularly natural gas, despite gas flows …
2nd September 2022
The latest manufacturing PMIs out of China and emerging Asia point to a worsening demand outlook for commodities, but especially industrial metals . This adds weight to our view that industrial metals prices could fall further, although high production …
1st 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 …
We’ve raised our near-term natural gas and coal price forecasts across the board this week to account for the recent slump in Russian natural gas exports to Europe, the likelihood that those exports will remain low, and the knock-on effect that higher gas …
26th August 2022
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 forecast palladium demand to pick up slightly over the next two years, while supply growth is set to remain muted, keeping the market in a deficit throughout. Continued drawdowns of stocks over that period therefore make it likely that prices, …
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 …
Production stuck in low gear Global steel production fell at a faster pace in July. The latest data are broadly consistent with our view that supply will fall this year, which should put a floor under prices even with soft demand . The World Steel …
23rd August 2022
The supply outlook has deteriorated Global aluminium production rose at a slightly slower pace in July, mostly because production in North America fell at a faster clip, while output in Europe continued to slump. Production growth could slow further this …
22nd August 2022
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
