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Commercial crude oil stocks set to rise even further There was another strong rise in commercial crude stocks last week. With little prospect of any upturn in domestic demand anytime soon, commercial stocks should continue to rebound in the coming months. …
23rd February 2023
We don’t think that the election in Nigeria on Saturday will lead to a sudden improvement in crude oil production. The oil industry’s challenges in the country are too deep-seated. But the long-awaited Petroleum Industry Bill, passed in 2021, could at …
22nd February 2023
The war in Ukraine. Ageing populations. Rising temperatures. Investors are having to grapple with a formidable range of uncertainties around the long-term outlook for the global economy and markets. Their challenge is compounded by the fracturing of the …
We expect the wheat price to remain high this year as events in Ukraine and drought in other key producers hurt supply. Although the wheat price should drop back after this, the worsening impacts of climate change will put prices back on an upward trend …
Global steel output remained depressed in January and is unlikely to pick up markedly in the coming months. However, a rebound in China’s demand and lower power costs in Europe should prompt some recovery in supply later in the year. The World Steel …
The sharp fall in European electricity prices sets the stage for a recovery in metals output across the region. As power prices are still historically high and unlikely to fall that much further, however, the potential for a full and rapid recovery is …
Aluminium production to slowly increase this year Global aluminium production fell slightly in January compared to December, although the bigger picture is one of fairly steady production since the middle of last year. We expect production to respond to …
20th February 2023
Most commodity prices fell this week (1 & 2) due to concerns about the persistence of high inflation in the US. Data showed US CPI inflation coming in slightly stronger than expected in January, pushing up interest rate expectations and giving a boost …
17th February 2023
Russia’s crude oil production has, up until now, been remarkably resilient in the face of Western sanctions. But the recent announcement of a voluntary cut seems to be the first concrete sign that Russia is concerned about its ability to maintain output …
A combination of higher interest rates and rising raw material prices have interrupted the long-term declines in the costs of renewables and battery power, and could push costs up further in the near term. However, such pressures will dissipate as policy …
16th February 2023
Commercial crude oil stocks looking healthy Commercial crude stocks rose to their highest since June 2021 last week due to lower refinery activity. With crude demand likely to remain sluggish over the coming months, and the US government set to sell …
15th February 2023
Anecdotal reports and high frequency data suggest that ongoing civil unrest in Peru is beginning to choke off activity at key copper mines. But, if recent history is anything to go by, output can rebound rapidly so long as any closures are brief. The …
Output still below quota, demand will be key OPEC’s monthly report for February did not make any major revisions to its forecasts. That said, the group is clearly worried about both the outlook for global demand and supply from Russia. We think OPEC is …
14th February 2023
It was a fairly quiet week in commodities markets, although oil prices rose on concerns about earthquake-related disruption to exports from the Turkish port of Ceyhan and Russia’s announcement of a 0.5m bpd cut to production in March. By contrast, the …
10th February 2023
Refinery activity to remain subdued this quarter Commercial crude stocks rose again this week, despite a rise in inputs to refineries. That said, refinery activity is unlikely to pick up markedly in the coming weeks given ongoing maintenance and only …
8th February 2023
Overview – We think prices will ease back in the coming months as optimism about China’s reopening is tempered and slower economic activity in advanced economies weighs on demand. However, the prospect of Fed easing and stronger economic growth in 2024 …
3rd February 2023
The EU’s ban on imports of Russian petroleum products will come into force on Sunday, which could raise EU fuel prices and weigh on Russia’s product exports. However, we suspect Russia will offer steep discounts to non-EU buyers , which will help to …
The EU’s imminent ban on Russia’s refined oil may see EU prices rise, but major disruption is unlikely. Even so, Russia will find it more difficult to find new buyers for its refined oil than it did with crude. The EU will need to find alternate supplies …
The global supply of platinum group metals is likely to be increasingly strained by electricity shortages in South Africa. This poor supply outlook is a key reason why we forecast the prices of these metals to remain high over the next year or so, even as …
Slow refinery rebound continuing to boost commercial crude stocks Commercial crude stocks continued to climb last week as refinery activity remained in the doldrums and net imports rose. We believe that a recovery in refinery activity and higher demand …
1st February 2023
The January survey data out of China point to a revival in oil demand, but relatively flat metals demand. This is consistent with our view that the recent rally in metals prices is a little premature. We think prices will rise more sustainably later this …
Global steel supply to remain subdued in early 2023 Global steel output slumped in December and fell sharply in 2022 as a whole. With demand likely to be weak, at least in the first half of 2023, we do not expect a marked rebound any time soon. The World …
31st January 2023
After rising sharply for much of this year, the Lunar New Year holiday in China meant that commodity prices generally took a bit of a pause this week. The only exceptions were natural gas prices, which continued to plunge, owing to lower-than-normal …
27th January 2023
Demand growth for industrial metals slowed sharply late last year. But attention is now geared towards the rebound in China’s metal demand. We think there is a good chance that the rebound disappoints. The CE Demand Proxies are our attempt to gauge the …
Clear signs of weakening product demand Even though the recovery in refinery activity stalled last week, petroleum product stocks rose amid weakening demand, which we expect to persist for a bit longer as the US economy slows further. The EIA’s weekly US …
25th January 2023
Markets still nervous over EU natural gas supply, despite high storage This is the first edition of a new monthly publication in which we will outline the latest moves in commodity futures markets and assess how they relate to our own view on …
While China’s reopening has improved the prospects for copper demand, the price has, in our view, surged by more than can be justified by developments there alone. We expect the copper price to drop back over the next few months as several advanced …
24th January 2023
The end of China’s zero-COVID policy continued to support most commodity prices this week, with many industrial metals prices extending their recent rallies. Economic activity appears to be recovering unexpectedly quickly in China and we have upgraded our …
20th January 2023
Aluminium production growth to struggle in 2023 Global aluminium production growth slowed to 2% in 2022 from 2.7% in 2021. We forecast that weaker output growth in China and another difficult year in Europe will lead to even softer growth this year. …
Commercial crude stocks will continue marching upward Commercial crude stocks unexpectedly increased this week. Weak refining activity and stable production helped stocks build. We expect that slower US economic activity over the next six months will …
19th January 2023
The theme of global economic fracturing, which was the focus of our Spotlight Series of research last September, is at the centre of economic discussion in 2023, including at Davos. We held an online drop-in session yesterday to update clients on our …
The election of left-wing candidate Lula for a third term as Brazil’s president is unlikely to accelerate Petrobras’ sluggish shift towards large scale biofuel production. We expect proposed oil sector reforms to weigh on biofuel demand, while ongoing …
18th January 2023
OPEC keeps 2023 forecasts unchanged OPEC left its annual supply and demand forecasts broadly unchanged but tweaked the quarterly profile. Like us, the group expects demand to rise faster than supply, which is a key reason why we expect prices to rise over …
17th January 2023
Output from Franc e’s beleaguered nuclear industry jumped last month, raising hopes that a recovery is underway. However, we think any increase in France’s nuclear output this year is likely to be modest and will probably be offset by reactor closures in …
Widespread unrest across several regions in Peru could make the central bank’s job of reducing above-target inflation even more difficult while also threating to hamper activity in some of the country’s key industries, such as mining and tourism. Peru’s …
16th January 2023
China’s rapid reopening and the likelihood of policy stimulus there has improved the macro-economic backdrop for commodities in 2023. But with developed economies in recession, and a somewhat stronger dollar and weaker US equities in Q1, we think a …
The dismantling of China’s zero-COVID policy has come quicker than we and many had expected. Whereas we previously thought the first quarter would bring the worst of the economic disruption from surging COVID cases, it now appears the worst is behind us …
13th January 2023
Commodity imports generally rose in December, but fell in 2022 as a whole. In a possible sign of optimism around reopening, soybean imports skyrocketed. China’s unexpectedly swift switch to living with COVID should see commodity imports, particularly …
Disruption from China’s reopening is fading faster than we had expected and we have revised up our forecast for growth there from 2.0% to 5.5%. This means that global GDP growth will be stronger than we had expected this year and energy inflation will …
12th January 2023
Commercial crude stocks surge and could have further to rise Commercial crude stocks surged last week at the fastest pace since February 2021, as net imports rose and disruption to refineries lingered from the recent cold weather disruption. Going …
11th January 2023
Most commodity prices declined this week, with energy prices falling especially sharply. Unseasonably mild weather in Europe and the US weighed on heating demand, prompting a plunge in gas prices. The European natural gas price currently sits at levels …
6th January 2023
European natural gas prices have halved over the past month as usage stayed low and LNG imports hit record highs. Barring dramatically colder weather, EU gas storage looks set to be in a more comfortable position than we had expected. As a result, we have …
Hit to implied product demand from cold weather likely to be short-lived Commercial crude stocks rose last week due to refinery closures in the wake of the extremely cold weather. But this should be short-lived, with most refinery plants back online soon. …
5th January 2023
The December survey data out of China were uniformly downbeat. The plunge in the official services PMI points to a fall in oil demand, but we suspect that the hit to industrial activity (and metals demand) has been more modest. Looking ahead, we expect …
3rd January 2023
US demand looks set to hold up well, despite slower economic growth Commercial crude stocks rose last week owing to a rebound in net imports, which was largely the result of the reopening of the Keystone pipeline. More interesting was the jump in implied …
29th December 2022
It was a fairly quiet week in commodity markets. The only notable move was a slump in natural gas prices. The EU eventually agreed its long-discussed natural gas price cap early in the week, but it comes with so much conditionality that it is difficult to …
23rd December 2022
Demand growth for industrial metals slowed in October and almost certainly weakened further last month. We expect demand growth to remain sluggish, or even contract, in the first half of 2023 as the global economy slides into recession, whereas investors …
Unusually, investors have been reducing their net-long position in the oil futures market, but increasing their position in industrial metals. We suspect this reflects optimism about China reopening at a time when the global economy is entering …
22nd December 2022
Global steel supply well and truly in the doldrums Global steel output is now firmly in contractionary territory by any measure. With several headwinds unlikely to relent soon, it is likely that output will weaken even further from here. Figures released …
Flat US production will keep stocks low This week’s report showed a sizeable drop in commercial crude stocks as net imports fell sharply. With US production unlikely to rise by much and plans for strategic reserves to be refilled next year, crude stocks …
21st December 2022
