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Another rise in US production drove crude stocks higher last week, despite lower net imports and a rebound in demand from refineries. Surging oil supply from the US is a key reason why we expect oil prices to fall over the remainder of this year. … US …
14th March 2018
There was another significant rise in OPEC’s forecast of non-OPEC production in 2018, reflecting recent strong growth in the OECD. However, the cartel still expects the market to be in a deficit this year. In contrast, we expect the market to be in a …
There have been some big jumps in stocks of copper, aluminium and zinc since the start of 2018, but inventories of the other base metals have fallen slightly. Given that we expect demand to soften this year as China’s economy slows, stocks of most metals …
The liquefied natural gas (LNG) market looks set to remain comfortably supplied this year, particularly as we expect growth in Asian LNG demand to slow. Given that we are also forecasting a fall in the oil price, LNG prices should ease back this year. … …
12th March 2018
The big news this week was confirmation of President Trump’s tariffs on US steel and aluminium imports on national security grounds. This sent US steel prices even higher, but weighed on prices in China. Meanwhile, the latest data show that China’s …
9th March 2018
President Trump’s tariffs on imports of steel and aluminium are likely to be a bigger deal for the price of US steel than aluminium. But US steel prices have already surged, which coupled with higher-priced imports, seems likely to depress demand. As …
Whilst we do not think that the renegotiation of NAFTA is likely to have a significant impact on demand for most energy commodities, the possibility of more protectionist measures and the subsequent reduction in trade and GDP growth could weigh on demand, …
8th March 2018
Dwindling mine supply and, more recently, strong winter demand for car replacement batteries have given a boost to the price of lead. However, demand is weakening which, coupled with increasing secondary output, should ensure that prices fall back over …
China’s commodity import volumes fell back sharply in February, but this can probably be explained by the week-long New Year holiday which fell in the middle of the month. The bigger picture is that total imports in the first two months of the year showed …
A rebound in net imports and jump in US production drove crude stocks higher last week. Surging oil supply from the US is a key reason why we expect oil prices to fall over the rest of this year. … US Weekly Petroleum Status …
7th March 2018
If the US were to withdraw from NAFTA, it could lead to downward pressure on US agricultural prices. But the impact on the more industrial commodities, including energy, is likely to be limited. … Do the NAFTA talks have implications for …
The prices of metals diverged last month. The prospect of a blanket tariff on US imports led to a jump in the price of US steel. At the same time, concerns about demand, notably from China, weighed on the prices of some of the other industrial metals, …
Even if the US imposes sanctions on Venezuela’s oil sector we doubt that the impact on oil prices will be substantial. The US has already halved its imports from Caracas with no discernible effect on prices, whilst spare capacity in the rest of OPEC is …
6th March 2018
Strong growth in China’s stainless steel output and supply disruptions have buoyed nickel prices so far this year. In this Metals Watch , we take a look at the most recent developments in both demand and supply and assess the outlook for prices in 2018. … …
It was generally a negative week for commodity prices. Oil prices tumbled and precious metals prices were buffeted by Jerome Powell’s testimony, which all but ensured a rate hike this month. China’s official manufacturing PMI dipped sharply, which is …
2nd March 2018
Energy prices were volatile in February, buffeted by equity market gyrations and changing weather forecasts. Oil prices were particularly frothy, but still slumped on the month as US production continued to rise and stocks increased. Similarly, surging …
President Trump’s announcement of tariffs on steel and aluminium imports was expected. But what is perhaps more surprising is that the tariffs are particularly punitive and threaten to ignite retaliation, which could have significant ramifications for …
Commodity prices fell sharply in the wake of the sell-off in global equity markets in late-January, but have recovered much of the lost ground. The key sub-sectors of the S&P GSCI are now close to where they started the year. The main exception is …
1st March 2018
China’s unofficial manufacturing PMI edged higher in February, but the official survey reading dropped sharply. The trends in the PMIs are broadly consistent with the recent dip in metals prices. We expect prices to drop back further as economic growth …
A rebound in net imports drove crude stocks higher last week. Admittedly, imports are volatile so this could be reversed this week. But US oil production also resumed its upward trend and demand for gasoline eased back. We expect oil prices to fall …
28th February 2018
Global oil demand looks set to grow strongly again this year driven by accelerating economic growth in the US, Europe and India. However, a sharp slowdown in China’s economic growth will limit the increase in global oil consumption. Oil demand growth will …
27th February 2018
The latest trade data for India and China were a mixed bag. On the one hand, China’s gold imports bounced back, pointing to strong demand ahead of the New Year holiday. On the other hand, India’s imports softened and local prices suggest that this trend …
World Steel Association (WSA) data showed a 0.8% y/y increase in global steel production in January led by higher output in the EU, India and Turkey. US production remained weak, which is one reason why we remain more positive on the price of US steel …
26th February 2018
Global aluminium output continued to grow strongly in January, led by increases in China and other Asian countries. With no apparent shortage of supply, we expect prices to ease back in 2018. … Global Aluminium Production …
The prices of most precious and industrial metals fell back this week in the wake of a small appreciation of the US dollar. The FOMC minutes, released on Wednesday, all but ensured another US rate hike in March and put downward pressure on the price of …
23rd February 2018
Stocks of copper and aluminium have risen strongly since the start of 2018, but inventories of the other base metals have fallen. Supply was tight in the smaller markets last year, but it is now showing signs of a rebound at a time of softening demand. As …
Coal prices have fallen back a little since the start of this year as temperatures increased and supply picked up, but they remain high. This Energy Watch examines the outlook for demand and supply over the next few years and assesses the potential impact …
Inventories of crude oil slumped last week. However, this was mainly due to a drop in net imports which are notoriously volatile. As such, we think that stocks could rebound in the coming weeks, which coupled with further growth in US production should …
22nd February 2018
The recent slump in the Baltic Dry Index (BDI) may mean that demand for bulk commodities has softened, with negative implications for prices. But the relationship is far from straightforward. Indeed, even if the BDI revives, we think that the prices of …
There are early signs that investor sentiment in the metals markets is deteriorating, although more so for industrial metals than precious. Some of the technical indicators that we monitor have recently turned bearish and, in some cases, stocks are …
Commodity prices fell in the wake of the late-January correction in equity indices. Some appreciation of the dollar also weighed on prices, although the dollar has since fallen back. That said, all the main subsectors of the S&P GSCI Commodity Index, …
21st February 2018
US natural gas prices should rise this year as domestic demand and LNG exports experience an upsurge. However, a jump in supply will limit the increase in prices. … Strong demand to support US natural gas …
20th February 2018
The price of US steel has already benefited from the prospect of heightened protectionism in the US. Indeed, prices could actually fall back if President Trump decides to moderate his actions to reduce the risk of retaliation on US exports of other …
19th February 2018
The prices of most commodities rose this week, helped by a depreciation of the US dollar and a revival in global equity prices. Industrial metals, in particular, posted some large gains, although volumes were thin late in the week as the Chinese New Year …
16th February 2018
Surging supply and slowing demand growth are likely to push the global market back into a small surplus in 2018 which should put further downward pressure on oil prices over the next two years. However, we are not expecting prices to revisit their recent …
The price of iron ore has been remarkably stable recently despite a slump in Chinese steel prices. In this Metals Watch , we make the case that the market is factoring in too much optimism about demand at a time of rising supply. As such, we expect prices …
We are revising up our end-2018 forecasts for gold and silver prices to reflect the fact that we no longer expect the US dollar to strengthen this year. Nonetheless, we are not inclined to do a U-turn and suddenly become bullish on prices. Indeed, we …
15th February 2018
Inventories of both crude oil and gasoline rose again last week. Meanwhile, production in the US continued to grow. We expect the surge in US output to push the market back into a surplus this year, which will drag prices down. … US Weekly Petroleum …
14th February 2018
We are sceptical that President Trump’s infrastructure plan will be approved by Congress. What’s more, even if congressional approval is forthcoming, the reliance on state and local governments and private investors to do most of the heavy lifting appears …
13th February 2018
There was a significant rise in OPEC’s forecast of non-OPEC production in 2018, reflecting recent strong growth in the US. However, we still think that the cartel is underestimating growth in output this year and overestimating the strength of demand. … …
12th February 2018
The prices of metals and energy commodities slumped this week in the wake of the sell-off in global equity markets and a general move out of riskier assets. Markets shrugged off data showing strong Chinese commodity imports in January, but this may be …
9th February 2018
We think that concerns about surging supply in the US will put further downward pressure on oil prices in the coming months, even if global equity markets stabilise. … Oil prices have further to …
We expect the platinum market to be broadly in balance this year, after a sizeable surplus in 2017. However, the recent price increase means that this is already largely factored into prices. As such, we expect platinum to end the year at around current …
Commodity prices started 2018 on a high, bolstered by optimism about global growth prospects and the ongoing depreciation of the US dollar. However, we think there are now clear signs that growth in China’s economy is slowing and we expect the US dollar …
China’s commodity import volumes rebounded strongly in January. Admittedly, this partly reflects seasonal volatility associated with the Chinese New Year. But it also seems likely that demand from the industrial sector held up quite well at the start of …
8th February 2018
Production increased dramatically last week, mainly due to revisions to the historical data. However, output is growing much more quickly than many expected which should continue to put downward pressure on prices over the rest of the year. … US Weekly …
7th February 2018
Global gold demand fell to its lowest level in eight years in 2017. Weak investment demand accounted for most of the decline. With demand from India and China likely to remain subdued and Fed tightening discouraging investment, we think that global …
6th February 2018
The latest falls in commodity prices have more to do with risk aversion than any deterioration in underlying demand and supply fundamentals. That said, we had always expected commodity prices to fall this year as we suspect that prices are reflecting too …
We expect the prices of most energy commodities to fall back over the next few months as the weather normalises and the dollar stabilises. Indeed, prices fell at the start of February amid a broader market selloff and growing signs that supply is …
The prices of most metals continued to make gains in the first month of 2018. The persistent depreciation of the US dollar supported the prices of all the metals, but notably that of gold. However, concerns about demand, notably from China, started to …
5th February 2018
