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OPEC supply to continue rising, regardless of new quotas OPEC’s oil production increased sharply in June, primarily because Saudi Arabia continued to unwind its voluntary production cut. Output should rise further in July on the back of larger quotas, and …
15th July 2021
Rising US production may pose a further headache for OPEC+ US commercial crude stocks fell for the eighth week in a row, and domestic production is now showing signs of life. This may add to the pressure on OPEC+ to relax output cuts more quickly and …
14th July 2021
China’s imports of most industrial commodities continued to fall in June. We expect import volumes of near all commodities, but especially the industrial metals, to ease further in the months ahead as economic growth slows and activity in industry and …
13th July 2021
The oil market will probably struggle to find direction in the coming weeks until there is some resolution to the impasse created by the failure to reach unanimous agreement at the last monthly OPEC+ meeting. There remains the very real risk of a …
9th July 2021
US gasoline demand soars ahead of the holiday US crude stocks continued to plummet, and gasoline demand shot up ahead of the Independence Day holiday. We expect US product demand to remain strong in the coming weeks as travel activity picks up in tandem …
8th July 2021
Overview – Oil prices were rising in June even before the July OPEC+ meeting ended in disarray, without agreement. Strong growth in demand as economies lift virus-related restrictions is expected to continue to support the prices of all energy commodities …
6th July 2021
The failure of OPEC+ to agree to new production quotas has created considerable uncertainty about the group’s oil production going forward. In this Update , we lay out three possible scenarios for OPEC+ output in the coming months and what they would mean …
We expect strong growth in oil demand this quarter as virus-related travel restrictions are lifted in most of the largest consuming countries . At the same time, supply will remain relatively constrained even if, as we think likely, OPEC+ is gradually …
2nd July 2021
The breakdown of China’s trade data for May shows that the recovery in imports of scrap and tin ore has hit a few stumbling blocks. Were these issues to persist, they could help to put a floor under prices even if, as we expect, the decline in demand for …
1st July 2021
China’s June survey data show softer growth in activity and supports our forecast that economic growth will slow from here, which will weigh on the prices of most commodities, especially the metals . The headline official and unofficial manufacturing PMIs …
More good news on US crude demand US crude stocks fell for the sixth consecutive week amid the ongoing rebound in product demand as the virus-related restrictions continue to be lifted. That said, if OPEC+ decide to gradually raise output from August (as …
30th June 2021
After rallying from April onwards, the price of gold has dropped back in recent weeks. We expect the price of gold to fall further over the next couple of years as long-dated US real yields climb . The price of gold rallied from $1,700 to $1,900 per ounce …
Exchange stocks of base metals have risen this year, which usually suggests that markets are well supplied. But much of the recent build in stocks has been opportunistic and driven by financial considerations rather than a surplus in the market. …
29th June 2021
Strong industrial demand and constrained domestic supply will support US natural gas prices throughout the remainder of this year. However, we expect that the average price will fall in 2022 in large part because of higher production . The ongoing …
28th June 2021
Most commodity prices recouped some of their post-FOMC losses this week. Investor concerns surrounding Fed tightening have seemingly eased, which weighed on the dollar. At the same time, news that a bipartisan agreement has been reached over a US …
25th June 2021
Stock drawdowns to continue, but unlikely to accelerate US commercial crude stocks declined again last week. However, with both implied demand for most products and refinery activity close to pre-pandemic levels, we think the pace of draws will stabilise …
23rd June 2021
Although we remain optimistic about the near-term demand outlook, we think that the price of US lumber will fall further in the coming months as domestic supply continues to revive . The price of US lumber (CME random lengths) briefly rose to a record …
Growth in China’s steel output is slowing Growth in global steel production is still running high in year-on-year terms owing to the low base a year earlier. However, daily production in May was somewhat lower than April, as output in China dipped. We …
22nd June 2021
Global production to edge higher in the coming months Average daily global aluminium production edged up in May as smelters continued to take advantage of high prevailing prices. We think that production will rise further in the near future . According to …
21st June 2021
Commodity prices fell sharply this week following a more hawkish than expected Fed meeting and a disappointing batch of activity data out of China . Both developments are in line with our forecast of higher real yields and a stronger dollar in the US, as …
18th June 2021
Lead demand should bounce back this year, despite the shortage of semiconductor chips which is currently curtailing global vehicle production. However, we think a simultaneous recovery in lead supply (particularly secondary supply) will keep the market in …
Global oil demand looks to have held up much better so far in 2021 than during 2020, despite a resurgence of COVID infections in many parts of the world . We expect strong oil demand growth to continue for the rest of the year, but this won’t stop rising …
17th June 2021
Rebound in production won’t last long Despite an uptick in domestic production, US commercial crude stocks plummeted last week as refinery throughput rose and net imports slumped. However, we suspect that the pace of draws will slow in the coming weeks as …
16th June 2021
Higher production from OPEC+ member states and in the Americas means that global oil production is set to rise sharply over the next eighteen months. This is the reason why we expect oil prices to fall from Q4 this year and throughout 2022 . Global oil …
The prices of most industrial commodities held up fairly well this week . However, the slowdown in broad credit growth and the fall in volume terms of China’s imports of industrial commodities in May suggests that commodity demand there is coming off the …
11th June 2021
OPEC oil production to rise beyond July OPEC’s oil production increased sharply in May on the back of higher quotas and Saudi Arabia starting to phase out its voluntary production cut. Production will rise again in both June and July in line with higher …
10th June 2021
Diminishing scope for further falls in crude stocks US commercial crude stocks fell again last week, in part due to higher refinery activity. However, rising product stocks and lower product demand suggest the downward trend in crude stocks may slow soon …
9th June 2021
After rising (and falling) sharply at the start of the year, Asia LNG prices have started to push higher again recently. This latest rise seems to have been driven by a rebuilding of stocks, which should run its course over the coming months. That said, …
Even after accounting for a fall in Brazilian production and a rise in global demand, we still expect the size of the global sugar market surplus to increase in 2021/22, which will weigh on prices . The price of raw cane sugar (sugar #11) has surged to …
8th June 2021
China’s imports of industrial commodities, particularly iron ore and unwrought copper, eased back in May. We expect import volumes of both these commodities to fall further in the coming months as policy support continues to be gradually withdrawn . …
7th June 2021
In what proved to be one of the shortest OPEC+ meetings ever, the group agreed this week to stick to its previously planned increase in output in July . Oil prices rose sharply on the back of the announcement, with Brent now trading above $70 per barrel. …
4th June 2021
Ongoing decline in stocks to help lift oil prices a little higher US commercial crude stocks declined for the fifth week in a row, owing to the robust economic recovery and a further increase in inputs to refineries. With demand set to rise further, and …
3rd June 2021
Overview – May was a strong month for the prices of most metals, but we suspect that this may be as good as it gets. After all, if we’re right in expecting economic growth in China to slow in the second half of this year, the prices of most industrial …
Overview – Cold weather in parts of the northern hemisphere helped push up the prices of coal and natural gas last month, while oil prices also rose. We still think that average energy prices will be higher this year than last but expect the prices of …
2nd June 2021
Overview – Prices generally rose in May, bolstered by signs of recovery in the global economy – led by the US – and stronger commodities demand. While prices could make further gains in the near term, we expect the prices of most commodities to be in …
The key takeaways from China’s May survey data are that while demand remains robust, supply shortages are leading to inventory drawdowns and price inflation. The data are broadly positive for commodity demand, but we think the withdrawal of fiscal …
1st June 2021
OPEC+ is set to meet next Tuesday, when we expect the group to agree to continue with its incremental increases in production through to July . We think it unlikely that the group will address the thornier issue of the ongoing rise in Iran’s production …
28th May 2021
We think that the prices of wheat, corn and soybeans will decline over the next six months owing to a rebound in global supply and slower demand growth in China . The prices of wheat, corn and soybeans all soared to multi-year highs earlier this year …
27th May 2021
Limited domestic supply, expensive imports and strong growth in demand have fuelled the rally in US steel prices. But with supply set to improve, at a time of softer growth in demand, prices should fall . Steel prices have soared globally since their …
26th May 2021
Stars aligning for higher oil prices Last week’s decline in US crude stocks adds to evidence that the oil market is getting tighter. This supports our view that oil prices have further to rise in the months ahead, before higher OPEC+ supply brings the …
In the short-run, China has no choice but to grit its teeth and keep buying Australian iron ore, even as bilateral ties continue to fray . But this dependence will diminish over time thanks to increased supply from other sources, greater use of recycled …
While China’s announcement that it will crack down on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable …
The price of Pacific coal has surged to just over $100 per tonne for the first time since 2019. We think that the price will remain elevated for the rest of this year in large part owing to strong demand . Despite China’s unofficial ‘ban’ on coal imports …
25th May 2021
The prices of most commodities dropped back again this week as global equity markets struggled to make ground and virus cases in parts of Asia continued to rise. Meanwhile, reports emerged that good progress had been made in negotiating a new nuclear deal …
21st May 2021
The recent disruption to global auto production stemming from ongoing semiconductor microchip shortages poses a downside risk to our price forecasts for platinum and palladium. In this Update , we map out the potential impact on demand for the metals from …
Global production rising, despite lockdowns Global steel production rose again in April as lower output in India, in particular, was offset by sizeable jumps in production in China, Russia and Brazil. For now, virus-containment measures remain a key …
High prices to incentivise production growth Average daily global aluminium production was unchanged in April, but we continue to expect that output will increase this year given current high prices and premiums . According to the International Aluminium …
20th May 2021
The recent depreciation in the US dollar has helped to boost commodity prices. But while we expect a stronger dollar to weigh on most commodity prices later this year, we think that oil prices will still rise . The majority of commodity benchmarks are …
Curtailment of refinery activity to boost crude stocks next week US commercial crude stocks increased last week as inventories continue to be drawn down from the US government’s strategic reserves. We expect commercial crude stocks to rise further next …
19th May 2021
A revival of the nuclear deal with Iran would pave the way for sanctions to be lifted, boosting the country’s oil production and weighing on prices. By contrast, while we still expect Iranian output to increase if a deal isn’t agreed, we think this would …
17th May 2021
