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The latest data show that OPEC has more than met its production quota, albeit mostly down to Saudi Arabia. However, with non-OPEC oil supply increasing and demand growth waning, we still think that the price of Brent oil will drop to $50 per barrel by …
14th March 2019
US crude stocks fell sharply and we expect them to continue to fall in the coming weeks as refineries come out of maintenance. However, higher refinery activity should also start to stabilise gasoline stocks. … US Weekly Petroleum Status …
13th March 2019
There have been some dramatic moves in price spreads between different grades of crude oil in the last year. For the most part, spreads have reflected differences in the underlying physical demand and supply of a particular crude. In this Energy Watch , …
In stark contrast to recent years, investors have been drawn to platinum so far in 2019. As a result, ETF holdings have risen by more than a sixth in just two months and are rapidly approaching the all-time high set in 2015. This Metals Watch will explore …
12th March 2019
Elevated levels of global end-stocks have prompted us to review our price forecasts. We have downgraded our end-2019 corn price forecast but left the price outlook for wheat and soybean unchanged for now. … High global stocks to weigh on wheat and corn …
After a relatively quiet week, the prices of most commodities took a tumble on Friday afternoon following the release of weak US February employment data. A rise of just 20,000 in non-farm payrolls, combined with poor Chinese February trade data and a …
8th March 2019
China’s imports and exports dropped sharply in February. Admittedly, some of the plunge can be explained by the shift in timing of the Lunar New Year holiday, but we expect trade to remain weak in the coming months as global demand cools and domestic …
Theoretically, there should be a relationship between the price of oil, the number of oil rigs actively drilling and oil production. However, the relationship appears to have broken down in the past. In this Energy Watch , we investigate the possible …
7th March 2019
Industrial metals prices have risen robustly this year, but we think that the rally is running out of steam. Even if a US - China trade agreement is reached, a slowdown in global growth and an accompanying rise in risk aversion will send industrial metals …
US crude stocks jumped, largely owing to an increase in net imports. In contrast, product stocks fell, which is partly a seasonal phenomenon but does suggest that US consumer demand is holding up well. … US Weekly Petroleum Status …
6th March 2019
The price of oil continued to climb in February as the US and China inched towards a trade deal, and Saudi Arabia announced that it would cut output further. However, we still think that prices will fall by end-2019 owing to soft demand arising from a …
Increasing signs of a US-China trade deal prompted a return of risk appetite and led to the prices of many industrial metals hitting multi-month highs and a sell-off in gold and silver. However, even if a trade agreement is reached, we expect global …
There has been a surprisingly muted reaction in commodity markets to the latest reports that China and the US are close to a trade deal. We think this reflects a combination of the fact that much of the good news has already been priced in, as well as …
5th March 2019
Next week, commodity markets will be closely watching the annual meeting of China’s parliament, the National People’s Congress, hoping for additional fiscal stimulus. The government’s Work Report and Budget will be presented on the first day. Meanwhile, …
1st March 2019
Despite having risen by over a tenth in the past six months, we believe that the upswing in the gold price has further to run. Our forecast of falling equity prices this year suggests strong demand for safe havens, including gold. We have revised up our …
The latest pick-up in the unofficial PMI data does not change our expectation of a slowdown in China’s economy, which underpins our forecast of mostly weaker commodity prices, especially industrial metals. … Improvement in China’s PMI unlikely to …
Oil and industrial commodity prices rose in February on hopes of a US-China trade deal. However, even if there is a deal, we forecast that prices will fall back owing to lower demand as global economic growth slows. … Boost from trade talks to prove …
28th February 2019
The plunge in the spot LNG price is in large part the result of a mild northern hemisphere winter. As such, prices may rebound if the weather normalises, but rapid growth in supply will prevent sizeable gains. … LNG price slump is not all about the …
Since the start of 2019, commodity indices have increased at the same time as a host of asset classes, including US and emerging market equities. This Commodities Watch will explore whether this rising tide is set to continue or whether it hits the rocks. …
27th February 2019
US crude inventories recorded a significant draw, which was impressive considering US production continued to tick up and is now at a record-high. … US Weekly Petroleum Status …
Today’s data show global steel output stuttered out of the starting blocks at the beginning of 2019 and we expect output growth to remain lacklustre this year. … Global Steel Production …
26th February 2019
January trade data showed that China’s gold imports surged but India’s imports were down on the month. We expect imports from both countries to decline in the months ahead as higher prices deter buying. … China and India Gold Imports …
The prices of many major commodities, including oil, gold and copper, hit multi-month highs this week, but we think that almost all will fall sooner rather than later. The rally this week was fuelled by signs that the US and China are inching towards a …
22nd February 2019
The US has now cemented its position as the largest oil producer in the world. Unsurprisingly, inventories rose, despite record-high exports, denting hopes of a further oil price rally. … US Weekly Petroleum Status …
21st February 2019
There has been much commentary in recent months on the balance of power in relations between the US and Saudi Arabia. Many of the areas of mutual interest are geopolitical in nature and we are not political analysts. But we think that we can make several …
Global production growth plummeted in January, but given that input costs are falling, we think that output growth will recover later this year. … Global Aluminium Production …
20th February 2019
The recent surge in the oil price reflects concerns about a supply shortfall, on the back of sharply lower production in some key OPEC producers. That said, there are already signs that growth in demand will be weaker this year, which will remove much of …
We have revised up our iron ore price forecast following the disaster at the Córrego do Feijão iron ore mine and its aftermath, given the negative implications for supply. However, with demand set to be lacklustre, we still think that iron ore prices will …
Slower economic growth in the two largest oil consumers will weigh on oil demand this year and is a key reason why we expect prices to fall, despite lower supply. Admittedly, China is likely to continue buying for its strategic reserve, but this will not …
19th February 2019
Exchange stocks in most base metals have slumped over the past year. Typically, this is associated with strong demand or weak supply growth, and results in higher metals prices. In this Metals Watch , we explain why we believe that this won’t be the case …
The price of palladium has reached another record high today, but we remain of the view that this elevated level is unlikely to last. In fact, it is now clear that supply rose strongly in 2018 which, coupled with the current slowdown in car sales, should …
15th February 2019
After rising strongly this week, the price of oil is likely to remain supported in the short term by clear signs of lower supply from OPEC (mainly Saudi Arabia) and the loss of Iranian and Venezuelan barrels. However, we think that slower growth in demand …
Constrained supply growth and surging demand from electric vehicles mean that we think that the price of copper will rise by over 60%, to nearly $10,000 per tonne, by 2025. This is likely to represent a high watermark for prices. Our long-term forecast …
14th February 2019
China’s major commodity exports rose in January, probably due to a combination of an earlier Chinese New Year holiday and sluggish domestic demand. Imports also painted a surprisingly resilient picture, but we don’t think that this will persist as the …
US crude stocks recorded a hefty build, primarily reflecting a decline in refinery inputs as net imports plunged and production remained unchanged. … US Weekly Petroleum Status …
13th February 2019
January production data showed that OPEC is more than complying with the output cuts announced in late 2018, which probably explains the relative resilience of oil prices in recent weeks. However, we think that weaker global oil demand will lead to excess …
12th February 2019
Oversupply has been a major headwind for many agricultural commodity prices in recent years. But we think that, in many cases, stocks will start to be drawn down in 2019, which should give a lift to prices. Admittedly, our forecast of slower global …
11th February 2019
The return of Chinese investors could lead to a sharp rise in the price of iron ore next week, given the likelihood of significantly lower Brazilian supply. However, the prices of other industrial metals may fall on Thursday if, as we expect, China’s …
8th February 2019
China’s industrial activity data suggest that metals demand held up well in the last quarter of 2018, but we don’t expect this to last in 2019 as a downturn in economic activity will weigh on demand. … China Industrial Metals Demand …
7th February 2019
US crude stocks nudged up, despite a fall in net imports and a rise in refinery activity. Although US product demand remains robust, we expect it to ease back later in 2019 as the economy starts to slow. … US Weekly Petroleum Status …
6th February 2019
Prices of base and precious metals, along with iron ore, have risen robustly so far in 2019 but we believe that prices will diverge sooner rather than later. We expect the prices of industrial metals to falter as the Chinese economy slows further, while …
5th February 2019
The price of oil rose strongly in January and is likely to remain supported in the coming months by the OPEC+ output cuts and the risk of severe disruption to Venezuela’s production. However, we think prices will ease back later in the year on the back of …
4th February 2019
Commodity prices have generally had a positive week, boosted by the US-China trade talks and the dovish tone adopted by the Fed at its FOMC meeting. However, the strong US employment report on Friday has tempered hopes that the Fed has finished its …
1st February 2019
Signs that the Fed was adopting a more dovish tone weighed on the US dollar in January, but boosted the prices of riskier assets, including commodities. However, we expect signs of slower global growth to dampen market optimism and lead to renewed price …
The latest weak PMI data underpin our forecast that China’s economy will continue to slow in the coming months, which we think will weigh on the prices of most commodities, but especially the industrial metals. … China slowdown is a headwind for …
Gold demand from the official sector soared to its highest level since 1967 last year as central banks became increasingly keen to diversify from dollar assets. But, we expect the big story for 2019 to be the return of investor interest, continuing the …
31st January 2019
Weaker demand, the ongoing transition away from coal and rising supply from Russia will lead to lower European coal prices in 2019. We forecast that the price of Rotterdam coal will fall from $80 per tonne currently to $70 by end-year. … European coal …
US crude stocks edged up a touch, as inputs to refineries plunged. Product demand is holding up well for now, but we expect it to fall later in the year as the US economy slows. … US Weekly Petroleum Status …
30th January 2019
Our forecast of slower global growth in 2019-20 is a key factor underpinning our bearish outlook for the prices of oil and coal. What’s more, we expect further declines in global equity markets and a resilient US dollar this year, suggesting that …
29th January 2019
The decision by the US to impose sanctions on Venezuela’s state-owned oil company, PDVSA, will lead to a large loss of export earnings in the next few months. If Maduro can cling on to power during this time (perhaps by securing loans from China and …
