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Energy prices will fall in 2024, although we think the big falls are now behind us. Supply has not been directly affected, but the Israel-Hamas conflict together with the tensions in the Red Sea have increased volatility in energy markets. We expect oil …
4th January 2024
Output from Nigeria’s oil refinery sector has been in terminal decline, inflating the fuel import bill at a time when the economy is already suffering from a shortage of hard currency. The new Dangote refinery and President Tinubu’s broader plans to …
Interest rate cuts across advanced economies this year will give some boost to economic activity, although it will remain relatively subdued. Nonetheless, industrial metals demand growth will pick up. Supply growth will cap price rises for some metals, …
3rd January 2024
China PMI surveys suggest that the economy lost momentum in December, but we suspect that the surveys are not reflecting economic reality. Activity and import data all point to resilient commodity demand. Either way, the construction PMI rose again last …
2nd January 2024
While the robusta price had the largest gain this week (~11%) due to ongoing drought and dry conditions in Vietnam and Brazil, the rebound in oil prices captured most of the attention, as this was seemingly driven by the shipping chaos . A perfect storm …
22nd December 2023
The high profile announcements from COP28 around renewable capacity pledges and fossil fuel usage are ambitious, but strike us as either overly optimistic or vague. While we think renewable energy consumption will increase markedly, fossil fuel usage is …
21st December 2023
Another monthly fall in China, but the US and India to remain at full blast The monthly falls in China’s steel production continued in November, but output over the year is almost certain to be higher than in 2022. Production in India grew quickly and …
More subdued production growth likely over the coming months After hitting a new record in October, global aluminium production slipped back in November. We suspect that the new record will not be toppled in the coming months owing to power rationing in …
20th December 2023
The attacks in the Red Sea are the third major disruption to maritime transport this year, alongside low water levels in the Panama Canal and collapse of the Black Sea Grain Deal. Much will depend on how long the disruptions last, but we think that they …
19th December 2023
This week was a tale of two halves. In the first, prices generally came under pressure , including oil which continued its post-OPEC+ meeting plunge as concerns of oversupply persist. There were signs later in the week that those concerns have some good …
15th December 2023
Overview – We expect most commodity prices to rise in 2024 as major central banks loosen monetary policy and economic activity starts to pick up. Meanwhile, China’s policymakers have taken steps to support the ailing property sector, which should be less …
The target from COP28 to triple global renewable generating capacity this decade is encouragingly ambitious. But as our Climate Reporting Tools show, the goal will be easier to achieve in some countries than others, and attention will also be needed on …
14th December 2023
The US dollar and the prices of major commodities, in aggregate, have often risen and fallen in tandem since 2021, in contrast to their strong inverse relationship for much of the past two decades. While we wouldn’t go as far as classifying the greenback …
12th December 2023
In the absence of major news, the majority of commodity prices drifted lower this week. Oil prices fell 4-5% as scepticism around the effectiveness of OPEC’s latest production cuts took hold, and China’s trade data showed a marked drop in oil imports in …
8th December 2023
Europe’s natural gas price will continue its downward trend in 2024-25 as more LNG supply enters the market . And while there may be some recovery in demand as prices fall, we think there has been a structural shift down in European gas consumption. While …
China’s commodity imports mostly rose in November, but there was a sharp drop in crude oil imports. We think that non-oil commodity import volumes will hold up in the coming months on the back of looser fiscal policy, but current high stocks could …
7th December 2023
Even though zinc supply growth is likely to remain solid owing to strong growth in China and easing input cost constraints in Europe, we think that those factors will be outstripped by a recovery in demand. As such, our forecast is for the zinc price to …
Cocoa prices neared a 45-year high in November on the back of concerns about supply from Côte d’Ivoire and Ghana. Constrained supply alongside high seasonal demand will, in our view, continue to support high cocoa prices through 2024, until new supply …
6th December 2023
Rising OPEC+ output in Q2 2024 should leave global crude supply less constrained than we had previously expected. This, together with only modest growth in global oil demand, should push the crude market into a small surplus in Q4. Accordingly, we have …
4th December 2023
The voluntary production cuts announced by OPEC+ this week will support oil prices in the first quarter of next year, but there is clearly dissent among the ranks. We think OPEC+’s next move will be to increase production. After much wrangling, some …
1st December 2023
China PMI surveys suggest that the economy flatlined in November, but there was good news for commodity demand with the relative strength in the construction PMI. We suspect that underlying activity is stronger than the PMIs and that this will support …
Today, OPEC+ announced 1mn barrels per day (bpd) of voluntary cuts to supply in Q1 2024. This comes on top of around 5mn bpd in cuts already in situ, and brings the total cut in the first quarter to around 6% of global production. The group is presumably …
30th November 2023
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
Guyana’s oil production looks set to grow quickly over the next few years even if the total volume can only play a small role in raising global supply. That said, substantial reserves and low break-even costs should mean that it can continue to produce …
27th November 2023
Moves in commodity prices have been fairly muted on the week, but this masks a dramatic mid-week plunge and recovery in oil prices. The big news was that OPEC+ announced a four-day delay to its policy meeting, apparently because of disagreements among …
24th November 2023
Coal prices in both Europe and Asia will fall next year as growth in demand eases. But the fall in Europe should be larger as we expect demand there to outright contract. This should ensure that coal prices in Asia trade at a premium to prices in Europe …
22nd November 2023
China steel output should fall some more The monthly fall in China’s steel production should continue over the next two months, but the outlook is a little brighter in 2024. Elsewhere, production rose in October, and India’s production in particular …
Supply stays strong Global aluminium production rose in October and set a monthly record. This is unlikely to be broken over the next few months as China’s output should fall as smelters curb output over winter. According to the International Aluminium …
20th November 2023
Gold and silver prices soared this week on renewed optimism that the Fed had hiked to the peak of its monetary policy mountain. We expect prices to rise further when interest rates begin to be cut in the first half of next year. Oil prices were not …
17th November 2023
The US and China once again backed the G20 goal of tripling global renewable energy capacity this week (from 2020), a goal which would help to keep the path to net zero emissions by 2050 on track. However, the speed of the energy transition is uncertain, …
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
Protests against a large copper mine have raged in Panama over the past few weeks. If mine production ceased, there would be noticeable impact on global supply but the risk of this happening is small. The mine is a key part of Panama’s economy and is only …
9th November 2023
We have raised our gold price forecast to reflect the current heightened geopolitical risk. We think the price will rise further next year as the limited fallout from the conflict won’t prevent the US Fed from starting to cut interest rates in 2024. Our …
The Vaca Muerta shale formation will alleviate some of the pressure on Argentina’s fragile balance of payments position by substantially reducing the country’s gas import bill and raising oil export revenues. While this is good news for the crisis-ridden …
8th November 2023
China’s import data for October indicated that its demand for commodities remains robust but we think that further growth in the next couple of months is likely to be modest. China’s preliminary trade data for October, released today , showed a …
7th November 2023
Energy and precious metal prices will remain volatile while there is a risk that the war between Israel and Hamas expands to include other countries in the region. For now, energy supplies have been largely uninterrupted, and prices should remain close to …
3rd November 2023
Oil prices continued to fall this week, perhaps reflecting less concern that the Israel-Hamas conflict will expand to other countries in the region and that Middle East oil supply will be negatively affected. Consistent with this, the price of gold fell …
Energy prices will remain historically high over the remainder of this year. The Israel-Hamas conflict has increased volatility in energy markets, but supply has not been disrupted. Oil prices will remain high as OPEC+ output cuts keep supply constrained. …
The underperformance of wind and solar equities since early 2021 has largely been driven by higher interest rates, which disproportionately affect the cost of renewables projects. But while the days of ultra-low financing costs are behind us, our …
2nd November 2023
The PMI surveys released so far for China weakened in October with the manufacturing PMIs falling back into contractionary territory. We think China’s demand for commodities will be supported by further fiscal stimulus over the next few months, but a …
1st November 2023
The conflict between Israel and Hamas continued to drive commodity prices this week. Oil prices fell back while gold prices defied the stronger dollar and held steady. Elsewhere, forecasts of cold weather sent US natural gas prices soaring. (See Chart …
27th October 2023
We think the cautious oil market reaction to the outbreak of conflict in Israel probably reflects the huge uncertainty about the eventual outcome, but also a somewhat lower “Middle East” risk premium. For context, the Brent crude oil price has risen by …
26th October 2023
The war between Hamas and Israel – and the potential for escalation to the wider region – has increased the uncertainty around the economic and financial market outlook, but in most scenarios is unlikely to generate a sustained hit to major asset markets. …
EU natural gas prices have risen in recent weeks highlighting that a reliance on LNG imports is not without risk. That said, prices should fall back next year as a significant amount of LNG export capacity comes online, first in the US and then in Qatar. …
25th October 2023
Argentina’s oil and gas production growth has slowed sharply recently due to pipeline capacity constraints. New projects should ease these bottlenecks, and production should rise from 2024. Admittedly, the expected increases in output are not large enough …
Further falls in global steel supply are likely Monthly global steel output in September fell in year-on-year terms for the first time in 2023, in large part due to a contraction in China’s production. With demand set to remain weak and low profitability …
24th October 2023
It was generally a strong week for commodity prices as mounting geopolitical tensions boosted the oil price. In turn, higher oil prices put upward pressure on most agricultural prices. (See Chart 1.) Chart 1: Price Changes (%, w/w) Source: Refinitiv …
20th October 2023
Robust supply growth, but it is mostly a China story After reaching a record high in August, global aluminium production eased back in September but remained strong. Given that demand growth is relatively subdued, the increase in global supply may only …
2023 is on track to be the warmest year on record, but somewhat ominously the headwinds to the green transition have strengthened this year. Some of these will prove temporary, particularly as short-term policy interest rates start to come down. That …
19th October 2023
After several years in a post-Fukushima wilderness, nuclear power’s ability to provide low-emission and reliable electricity generation has slowly brought it back into favour around the world. Several countries, particularly in Asia, are likely to bring …
