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China’s latest activity data are further evidence of a slowdown in its economy. This aligns with our view that industrial metals demand will soften in the year ahead, putting downward pressure on prices . China’s July industrial data were generally much …
18th August 2021
The UN’s latest Intergovernmental Panel on Climate Change (IPCC) report warned that ever-increasing greenhouse gas emissions are a ‘code red for humanity’, which could give further momentum to the green energy transition . This transition primarily …
13th August 2021
OPEC may need to reconsider supply plans OPEC’s oil production soared in July as Saudi Arabia unwound the bulk of its voluntary output cut . Although OPEC left its demand forecast unchanged, we think that the near-term demand outlook has deteriorated, …
12th August 2021
Recovery in US oil demand topping out Last week’s fall in crude oil and gasoline stocks suggests that growth in demand in the US is continuing to outpace growth in supply. However, following a strong recovery from its pandemic-induced lows, we suspect …
11th August 2021
While we expect both drilling activity and oil production in the US to pick up slightly over the next year or so, we doubt it will return to pre-pandemic levels anytime soon. This should keep the Brent-WTI spread narrow but is unlikely to prevent oil …
The latest trade data out of China adds to the evidence that demand growth in the world’s key commodity consumer is slowing. This supports our view that the broad-based rally in commodity prices from their pandemic-induced lows has run its course, and …
9th August 2021
Concerns surrounding the spread of the Delta variant of COVID-19 were the main driver of prices this week, but the impact on prices was far from uniform. Not surprisingly, oil prices slumped as many countries in Asia, including China, tightened travel …
6th August 2021
A decision by the Biden administration to increase US biofuel mandates in 2021 and 2022 has the potential to be a gamechanger for corn demand. However, we think that this is unlikely, which is one reason why we think that corn prices will fall over the …
5th August 2021
Overview – Although the prices of industrial metals have picked up again recently, we still expect them to be falling over the next year or so. Underpinning this view are our forecasts for economic growth to slow in China, a continued rebound in supply …
4th August 2021
Gasoline demand to rise a bit further in the coming weeks US commercial crude stocks unexpectedly increased last week as net imports rose, but we suspect that inventories will fall back soon as demand for oil products, such as gasoline, continues to rise …
Overview – After a blistering rally for much of 2021, we expect the prices of energy commodities to be easing back as we move into 2022. Oil supply, particularly from OPEC+, is set to rebound strongly over the next year, which will be a factor weighing on …
3rd August 2021
China’s July survey data suggest that manufacturing and construction activity have continued to cool, which supports our view that a slowdown in China will weigh heavily on industrial metals prices . The Caixin and official manufacturing PMIs both …
2nd August 2021
The recent bounce in commodity prices continued this week, helped by the ongoing depreciation in the US dollar and a series of risks on the supply side which are rearing their head . Most notably, a spell of cold weather in Brazil has dampened the supply …
30th July 2021
Download the PDF for the Full Report Overview – We think that the widespread rallies in commodity prices from their pandemic-induced lows are now close to, or in some cases already past, their peak. Most notably, we anticipate that Q3 will be as good as …
29th July 2021
Build in crude stocks looks to have been a blip US commercial crude stocks resumed their downward trend last week. With domestic output still well below pre-virus levels and product demand likely to rise, we think crude stocks will fall further from here …
28th July 2021
Oil prices have been on something of a round trip this week – falling at the start of the week as OPEC+ finally agreed to a new output agreement and the ongoing spread of the Delta variant fuelled concerns over the global economic outlook, and then …
23rd July 2021
Further evidence of a slowdown in China’s steel production Growth in global steel production remained in double digits in June, but this largely reflects the low base for comparison from last year. Meanwhile, government-imposed environmental controls in …
Crude stocks build won’t last for long US commercial crude stocks unexpectedly rose this week as net imports surged. Nevertheless, providing that the Delta virus variant doesn’t lead to the re-imposition of virus-related restrictions, we expect that …
21st July 2021
We think a reversal of the factors that have fuelled the recent surge in European natural gas prices, namely high LNG prices, constrained supply and depleted stocks, will bring prices back down to earth by early 2022. However, a strong economic rebound …
20th July 2021
Production growth to accelerate as curbs on power in China are eased Global aluminium output growth softened in June, largely due to power cuts in China’s key aluminium-producing province of Yunnan. But these curbs have started to be relaxed in recent …
The OPEC+ agreement, signed yesterday, should help to stabilise oil prices and we expect Brent crude to trade in a narrow band of between $70 and 75 per barrel over next six months. But we expect Brent to fall into the $60-70 range in 2022 as more global …
19th July 2021
Reports that the UAE and Saudi Arabia have reached a compromise deal over oil production quotas support our forecast that oil prices will end the year lower . Admittedly, the deal is yet to be agreed by OPEC+. But even if the group fails to reach a formal …
16th July 2021
After reaching an all-time high in May, the price of copper has since come off the boil. And we think it will fall further over the next eighteen months or so, as a combination of weaker economic growth in China and a greater availability of both ore and …
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
