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The recent weakness in oil prices is largely due to concerns over persistently high US stocks and growing production there. However, the headline US crude stocks number is a little misleading and US production growth should slow over the rest of the year. …
5th May 2017
The prices of both industrial and precious metals suffered last month from waning investor optimism about the outlook for demand. Indeed, concerns appeared justified as China’s manufacturing PMI dropped sharply in April and it became clear that the US …
3rd May 2017
A sharp fall in the amount of oil in the US Strategic Petroleum Reserves (SPR) prevented commercial stocks from falling by as much as expected. … US Weekly Petroleum Status …
The prices of many commodities had a volatile month, led by the price of oil which is being buffeted by a lack of clarity on future supply. Industrial metals prices fell sharply on renewed concerns about the outlook for growth in China. At the same time, …
2nd May 2017
Both the official and unofficial April manufacturing PMIs for China surprised on the downside. There are now clear signs of cooling domestic demand, which will weigh on commodity demand. That said, activity in the construction sector is holding up well, …
This week has been dominated by speculation about whether OPEC will extend its output cuts at its next semi-annual meeting at the end of May. Even though an extension now appears likely, this failed to support the oil price, which has slipped back. A …
28th April 2017
The prices of many commodities have come off the boil recently on fading optimism about demand, rising geopolitical risk and the prospect of further US monetary tightening and dollar appreciation. Of course, there were some exceptions: the prices of both …
26th April 2017
Crude oil stocks slumped for the third consecutive week as demand from refineries rose to its highest level on record. Meanwhile, both gasoline and distillate inventories increased sharply. … US Weekly Petroleum Status …
China’s trade data for March depict a relatively weak picture for metals demand. While in some cases imports picked up in the first quarter, we think that optimism about demand rather than strong underlying usage has been the main driver of the recovery. …
25th April 2017
The latest trade data show a sharp rise in gold imports in China and India in March. While demand in India picked up ahead of the Akshaya Tritiya festival, Chinese buyers probably took advantage of lower prices. … China and India’s gold imports …
Even with slightly lower-than-expected domestic demand this year, higher exports and lower supply should be enough to put some upward pressure on US natural gas prices. … US natural gas prices to rise despite cooler …
We expect the change in the method for assessing the Brent global benchmark to have a negligible effect on the price of Brent going forward. Rather, we anticipate fundamental factors such as stronger global demand and OPEC supply cuts to be the main …
24th April 2017
World Steel Association (WSA) data showed a 5.7% y/y rise in global steel production in the first quarter. Output rose strongly in all regions of the world. … Global Steel Production …
China’s refinery output picked up pace in the first quarter, encouraged by higher prices and optimism about demand. Iron ore and steel production were growing particularly strongly, but prices have plummeted recently suggesting that output could ease back …
Concerns about oil demand in the US weighed on prices this week. On the other hand, Saudi Arabia has indicated that OPEC is close to agreeing an extension to its output cuts, which are currently due to end in June. Elsewhere, the euro-zone flash composite …
21st April 2017
According to the International Aluminium Institute (IAI), global primary aluminium output rose by just 4.3% y/y in March, but was still up by nearly 9% in the first quarter. … Global Aluminium Production …
20th April 2017
The increase in political tensions in the Middle East and North Korea had given oil prices a bit of a boost, but this already seems to have faded. Indeed, barring a dramatic escalation of the conflicts, very little oil supply is at risk and as long as …
The continued rebound in refinery activity led to a modest fall in US crude oil stocks and a rise in gasoline stocks last week. … US Weekly Petroleum Status …
19th April 2017
China’s activity and investment data for March were robust and point to a strengthening of metals demand in the first quarter. However, the prospect of a steadily tightening policy environment over the course of this year implies weaker demand in the …
Investor sentiment towards commodities has remained broadly positive over the last month, despite rising geopolitical tensions. It could be that signs of an improving global economic outlook are putting a floor under prices. That said, the prices of gold …
18th April 2017
The further deterioration in the US relationship with Russia and North Korea this week has supported the prices of precious metals. A weaker dollar, in light of President Trump’s comments about the risk to the US economy from a rise in the dollar, has …
13th April 2017
South Africa’s overall mine production continued its recovery in February, as higher prices incentivised producers to raise output. The strength of the production data was broad-based, with gold the only significant exception. … South Africa’s Mine …
Strong growth in China’s commodity imports in March would, at first glance, appear to be supportive of commodity prices. However, the rise in stocks of some commodities suggests that the buying has been fuelled by optimism about demand and exports of …
Crude oil stocks fell last week for only the second time this year as net imports declined and inputs to refineries increased. Meanwhile, inventories of petroleum products continued to fall. … US Weekly Petroleum Status …
12th April 2017
OPEC production fell in March but output in the group’s de-facto leader, Saudi Arabia, increased. What’s more, OPEC now expects even faster production growth in the US this year. The OPEC Monthly Oil Market Report (MOMR), released today, noted that …
There was a general drawdown of stocks over the last month, albeit on a relatively small scale. The main exception was inventories of tin, which have fallen by nearly 25% in the last four weeks, reflecting constrained supply. … Stocks edge …
11th April 2017
Relentless growth in inventories of US crude oil caused prices to slump in March. However, the headline stocks figures are potentially a little misleading and we think that the market is probably tighter than implied by the US inventory numbers. … Is the …
10th April 2017
The prices of most industrial commodities fell on Friday as investors turned more risk averse in the wake of the US missile attack on a Syrian air base. The main exceptions were the prices of oil and gold. While heightened political risk in the Middle …
7th April 2017
The latest data show only a slight increase in central banks’ holdings of gold in February. We anticipate that this weakness will persist throughout 2017. … Central banks’ gold demand …
The potential for further escalation of the conflict in Syria has boosted the prices of oil and gold today. But taking a step back, OPEC supply cuts and growth in demand should be the main drivers of oil prices, whilst rising US interest rates are likely …
Demand for tubular steel and distillates in the US is likely to receive a boost from the ongoing revival in oil drilling activity. This will be a factor supporting prices, at least in the US market. … Some wider implications of a rebound in shale …
6th April 2017
Oil prices broke out of the relatively narrow trading range they had been in for the last few months at the start of March as investors became concerned about the effectiveness of OPEC’s deal to cut supply. However, prices rebounded in the second half of …
5th April 2017
Crude oil stocks swelled last week contrary to expectations as production grew and exports slipped back. However, inventories of petroleum products still fell. … US Weekly Petroleum Status …
There were some signs of fading investor enthusiasm for industrial metals last month. Although January-February economic data out of China were encouraging, the shift in timing of the Lunar New Year holiday can create distortions. Moreover, stocks of many …
After a weak start to the month, the prices of both gold and oil subsequently rebounded, despite the Fed’s decision to hike interest rates. The accompanying dovish statement lowered expectations of further interest rate rises. The dollar also weakened, …
3rd April 2017
The price of oil jumped this week on a combination of renewed fighting in Libya which disrupted oil production and speculation that OPEC members will extend their output cuts beyond the June deadline. Meanwhile, buoyant economic data out of the US, Europe …
31st March 2017
The US price of lumber has risen by close to 20% since the start of the year, following an increase of over 20% in 2016. Over the course of last year, the price was playing catch-up with developments in the US housing market. More recently, the threat of …
Sentiment towards metals has soured somewhat over the past few weeks. We think that, in some cases valuations still look stretched, given prospects for further monetary tightening in the US and softer growth in China. As such, we would not be surprised to …
29th March 2017
US crude oil stocks rose slightly last week, however there were further drops in inventories of gasoline. … US Weekly Petroleum Status …
The prices of US natural gas and renewable power are likely to be far more important to the US coal industry than President Trump’s attempts to deregulate and revitalise it. … Trump ends the “war on …
Robust economic growth in Europe’s key economies should support oil demand this year. Indeed, a pickup in global economic growth is likely to help to absorb the excess oil supplies in the market which are currently weighing on prices. … Europe’s oil …
28th March 2017
There are many drivers of the price of aluminium, including demand, supply and investor sentiment. However, in this Metals Watch, we are going to focus on the supply-side. In particular, we are going to assess the outlook for the cost of some of the main …
27th March 2017
The latest import data from China and India show a mixed picture of gold demand in the two largest consumers. While China’s demand has started the new year on a soft note, an easing of the liquidity crunch in India saw imports rise to a three-month high. …
The price of oil took a tumble this week on persistent concerns about high US stocks, while copper also fell as the strike at the world’s largest mine was called off. More generally, there were signs of fading investor interest as prices drifted or fell, …
24th March 2017
Steadily rising crude stocks have sent prices tumbling recently. This Energy Watch looks at whether our assumptions about OPEC, US shale oil production and demand are still valid and where the potential risks to our price forecasts might lie. … Are we too …
The price of zinc has climbed higher since the start of 2017 on expectations that strong demand coupled with dwindling supply, following last year’s output cuts and mine closures, would lead to a shortage of the refined metal. However, we think that the …
China’s metals imports appear to have started the year on a soft note. Higher prices might have deterred purchases but we think that, in some cases, demand has also been sluggish. That said, we are wary of reading too much into the data given the usual …
23rd March 2017
Cold weather and strong economic growth have supported coal consumption in China recently. But a slowing economy and strong growth in renewables should undermine demand later in the year. … China’s coal demand to resume downward …
World Steel Association (WSA) data showed a 4.1% y/y rise in global steel production in February, in large part driven by rapid expansion in China and India. … Global Steel Production …
22nd March 2017
US crude oil stocks jumped again last week due to a rise in imports, but there were further drops in inventories of gasoline and distillate fuel. … US Weekly Petroleum Status …
