Analys
SEB – Råvarukommentarer, 17 mars 2014

Rekommendationer
Kort sammanfattning
Råvarumarknaderna var relativt stökiga förra veckan. Koppar inledde veckan med att falla kraftigt, liksom zink. Vetepriset i USA steg med 6%, men backade med 2% i Europa. I Europa, som var soligt och varmt, men nederbördsrikt i svensk/norska fjällen, föll elpriset kraftigt och noterade en ny kontraktslägsta för det tredje kvartalet. Globalt odlingsväder har slagit om från torrt i Syd- och Nordamerika till ordentligt vått och ”rain makes grain”. Sockerpriset föll mot slutet av förra veckan och kaffepriset ser ut att vilja hänga på.
Kinas industriproduktion föll till 8.6% i årstakt i februari enligt statisktik som publicerades i torsdags. Det är ännu en bekräftelse på att landets ekonomi har problem och därmed har de flesta råvarumarknader problem. I diagrammet nedan ser vi förändringen i industriproduktion i Kina på årstakt sedan 2008.
Mot slutet av veckan kom nyheten att Kinas centralbank vidgar intervallet för den kinesiska valutan. Vi tolkar det som en önskan om svagare valuta och alltså en devalvering. Därmed sällar sig Kina till alla länder som vill devalvera sina valutor, dvs öka penningmängden. Det är positivt för ädelmetallerna.
Råolja – Brent
Oljepriset sjönk under lugn handel i veckan från 109 till 108.57 dollar per fat. Vi tror att det är lugnet före stormen, när oljepriset bryter stödet i den stora triangelformation som marknaden handlar inom.
Non-commercials (investerare) är rekordköpta terminskontrakt på NYMEX i New York, enligt CFTC:s rapport i fredags. De äger terminskontrakt för 407 miljoner fat olja. År 2010 var de nästan inte köpta olja alls. Tänk om sentimentet ändrar sig!!!
Antalet borr-riggar i USA steg i veckan till 1809 (förra veckan 1792) stycken enligt Baker Hughes. Det är återigen en ökning och bekräftar den trend vi skrev om förra veckan. Skifferboomen i USA har fått ny fart och kommer att resultera i en ännu högre produktionsökning i USA.
Årets lägsta oljepris brukar noteras i april. Förra året var det 97 dollar. I år är marknaden väsentligt svagare. Därför tror vi att priset kommer att gå ännu längre ner, kanske till 95 dollar.
Vi rekommenderar en kort position i olja, t ex med MINIS OLJA B S eller MINIS OLJA A S.
Elektricitet
Kvartal tre fortsatte falla, och nådde nästan ner till 24 euro per MWh. Varmt väder, en prognos om rikligt med nederbörd över svensk/norska fjälltrakten och ett prisfall på 7% i utsläppsrätterna bidrog till prisfallet.
2 veckors prognos för hydrologisk balans har stigit till +7 TWh (förra veckan +5 TWh).
Priset på kol är det enda som visar styrka just nu. EU importerar kol från Ryssland och det kan vara det som påverkar priset, liksom det kan ha gjort för palladium och nickel. 80 dollar är en viktig stödnivå och det är viktigt att den inte bryts.
Vi fortsätter med neutral rekommendation. Trenden är tydligt nedåtriktad, men priset är mycket lågt och söker en botten.
Naturgas
Förra veckan rekommenderade vi köp av BEAR NATGAS X4 S mot bakgrund av att priset stigit en längre tid på det kalla vädret i USA och att varmt väder nu ”borde” komma in i prognosfönstret. Samtidigt såg vi att antalet borr-riggar återigen ökar tydligt och de flesta av dem producerar gas. Japan drar igång sina kärnkraftverk nu och slutar därmed att importera LNG. Det har talats om, bland annat i en annons i New York Times i fredags som en privatperson (!) satt in med anledning av krisen i Ukraina, att EU skulle importera LNG från USA. Om det sker, som en del i det ”paket” som EU och USA ställer upp mot Ryssland efter söndagens ”val” i södra Ukraina, kan det verka stödjande på priset, men annars bör priset i första hand falla ner mot 4.30 – 4.20 dollar per MMBtu. Vi fortsätter med säljrekommendation och behåller BEAR NATGAS X4 S.
Koppar
Den väsentligt svagare industrikonjunkturen i Kina oroar. Priset på koppar har rasat med 13% hittills i år till den lägsta nivån sedan sommaren 2010. I ett tidigare veckobrev för någon tid sedan visade vi produktionskostnaden för Codelco, som är världens ledande producent av koppar. Den låg då ca 10% under priset och det senaste prisfallet bör alltså nu innebära att Codelco inte går runt. Det innebär att utbudet av koppar från nya gruvor kommer att minska på lite längre sikt, men på kort sikt kan priset gå under produktionskostnaden.
Värt att notera är dock att lagren vid LME fortfarande inte visar några tecken på att stiga utan fortsätter att falla.
Vi rekommenderar neutral position i koppar.
Aluminium
Aluminiumpriset påverkades av svagheten i kopparmarknaden, men tycks än så länge ha det mest mesta bakom sig.
Vi fortsätter med neutral rekommendation på aluminium.
Zink
Zinkrpriset har fallit hela vägen tillbaka från toppen vid 2150. Priset är nu vid ett tekniskt stödområde och vi tror att det är ett bra tillfälle att köpa zink vid.
Vi rekommenderar köp av ZINK S eller BULL ZINK X4 S.
Nickel
Nickel har till skillnad från de andra basmetallerna stigit i veckan. Som vi skrivit tidigare gynnas nickelpriset av oron för Rysslands/Ukraina-krisen. Priset har dock kommit upp till 16,000 dollar och det är en motståndsnivå, där t ex marknaden fann en botten i slutet av år 2012. Vi rekommenderar därför att man går ur långa positioner nu och lägger sig neutral.
Guld
I takt med att tillväxten tvekar såväl i Kina som i USA leder det till ökade förväntningar på monetär stimulans i Kina och mindre avtrappning av den monetära stimulansen i USA. Sådana uttalanden har också kommit från FED, bland annat att takten på ”tapering” kan diskuteras. Konflikten mellan Ryssland och Ukraina och EU:s och USA:s kostnader för att handskas med detta bidrar också till att ge stöd till guldpriset. Oron för en extrem upptrappning av konflikten, även om den har liten sannolikhet påverkar också guldpriset positivt. Guldpriset är känsligt för ändringar i sannolikheten för extrema händelser av den karaktären.
Med det sagt, börjar ändå guldpriset nå upp till tekniska motstånd. Den första passerades utan större bekymmer i veckan, men den andra vid strax över 1400 dollar kan bli svårare.
Nu har institutionella placerare börjat köpa guldfonder igen! Den gula kurvan visar antal miljoner uns som ägs via börshandlade fonder/certifikat/depåbevis. Innehaven i silver, den svarta kurvan, har ökat kraftigt sedan början av året, men förblivit oförändrad den senaste tiden.
Vi fortsätter tills vidare med neutral vy på guld. Vi skulle vilja köpa om det kommer en rekyl.
Silver
Silverpriset steg även det lite grand i veckan men befinner sig alltjämt mellan 20.50 och 22. Ett brott på uppsidan av 22 ger en teknisk köpsignal om den skulle inträffa. Det finns just nu ingen trend i silverpriset.
Nedan ser vi guldpriset angivet i silver (istället för dollar). Vi ser att guld är relativt dyrt i förhållande till silver, såväl i det korta perspektivet som i det långa. Vi föredrar därför att köpa silver, hellre än guld, men silverpriset ligger, som vi nämnde, fast under ett tekniskt motstånd på 22 dollar.
Vi anser att silver är mer köpvärt än guld och skulle vilja köpa på de här nivåerna, i synnerhet efter den rekyl som inträffat de senaste veckorna.
Platina & Palladium
Platina har problem att gå över det tekniska motståndet på 1481 dollar. Den senaste utvecklingen antyder att det finns en risk för en rekyl nedåt.
Palladiumpriset tog en paus efter utbrottet förra veckan. Det är ett vanligt marknadsbeteende och man kan dessutom då och då se en rekyl ner tillbaka till utbrottsnivån. Vi tror att palladiumpriset kan stå inför en större prisrörelse uppåt och väntar oss att se bekräftelser på det först genom att passera 785 dollar som var toppnoteringen under 2013.
Vi rekommenderar alltså en neutral position i platina och en köpt position i palladium.
Kaffe
Torkan i Brasilien är av allt att döma slut. Det har regnat i veckan som gått. Prognosen från GFS-modellen för de kommande två veckorna visar onormalt mycket nederbörd över Minas Gerais. Allra mest väntas falla över den södra delen, där kaffeproduktionen är som mest intensiv.
Tekniskt noterar vi att priset har brutit stödet för den allra mest intensiva uppgången, vilket signalerar en förestående rekyl. Tekniskt stöd finns i första hand på ca 180 cent.
Vi rekommenderar neutral position i kaffe, eller möjligtvis en mycket kortsiktig kort position.
Kakao
Priset på kakao i New York har gått upp från 2709 dollar per ton till 2997 sedan årsskiftet, alltså plus 10%. Uppgången är framförallt driven av en stark efterfrågan. Som vi ser i diagrammet nedan är priset på kakao återigen uppe vid 3000 dollar per ton, som är den nivå som priserna pendlade kring vid slutet av 00-talets råvaruboom åren 2009 – 2011. Det är möjligt att priset kan gå högre, men uppgångens momentum bör mattas av på de nuvarande höga nivåerna.
Kakaoterminsmarknaden präglas av en stor kort position i producentledet. Enligt fredagens Commitment of Traders – rapport från CFTC, som visar läget per i tisdags, var producenter korta över 90,000 kontrakt i det amerikanska kontraktet på kakao. Investerare var köpta 80,598 kontrakt. Investerarkategorin har börjat minska sin köpta position, som vi ser i diagrammet nedan. Alla tester visar att kausaliteten går från prisrörelse till agerande hos investerare och inte tvärt om, men bilden visar i vart fall att det positiva sentimentet hos aktörer som inte enbart är ute efter att bli av med risk, utan på att försöka förutspå prisutvecklingen, har blivit lite mindre positivt (även om de fortfarande är mycket positiva).
Kakaoterminerna på LIFFE i London handlas normalt sett högre än terminerna på NYBOT i New York. I diagrammet nedan har vi kvoten mellan London-kakao och New York-kakao, omräknat till brittiska pund per ton. Det är spotkontraktet vi ser.
Öppen balans är ungefär lika stor för både LIFFE och NYBOT, men NYBOT har nästan hela sin handel frontmånadskontraktet, vilket återspeglar positioner från indexfonder, som har valt det kontraktet och inte London-kontraktet. Londonkontraktet har en mer spridd handel och används av företag i Europa för prissäkring. Vi ser också att det råder contango i NYBOT-kontraktet för korta löptider (kanske pga long-only-indexfonder) medan det är backwardation i London-kontraktet. Även kakao följer alltså samma mönster som t ex vete, där det råder contango i USA, men backwardation i Europa.
Vi rekommenderar en neutral position vid dagens situation.
[box]SEB Veckobrev Veckans råvarukommentar är producerat av SEB Merchant Banking och publiceras i samarbete och med tillstånd på Råvarumarknaden.se[/box]
Disclaimer
The information in this document has been compiled by SEB Merchant Banking, a division within Skandinaviska Enskilda Banken AB (publ) (“SEB”).
Opinions contained in this report represent the bank’s present opinion only and are subject to change without notice. All information contained in this report has been compiled in good faith from sources believed to be reliable. However, no representation or warranty, expressed or implied, is made with respect to the completeness or accuracy of its contents and the information is not to be relied upon as authoritative. Anyone considering taking actions based upon the content of this document is urged to base his or her investment decisions upon such investigations as he or she deems necessary. This document is being provided as information only, and no specific actions are being solicited as a result of it; to the extent permitted by law, no liability whatsoever is accepted for any direct or consequential loss arising from use of this document or its contents.
About SEB
SEB is a public company incorporated in Stockholm, Sweden, with limited liability. It is a participant at major Nordic and other European Regulated Markets and Multilateral Trading Facilities (as well as some non-European equivalent markets) for trading in financial instruments, such as markets operated by NASDAQ OMX, NYSE Euronext, London Stock Exchange, Deutsche Börse, Swiss Exchanges, Turquoise and Chi-X. SEB is authorized and regulated by Finansinspektionen in Sweden; it is authorized and subject to limited regulation by the Financial Services Authority for the conduct of designated investment business in the UK, and is subject to the provisions of relevant regulators in all other jurisdictions where SEB conducts operations. SEB Merchant Banking. All rights reserved.
Analys
How renewable fuels are accelerating the decarbonisation of transport

On 16 November 2022, UK’s Royal Air Force (RAF) Voyager aircraft, the military variant of the Airbus A330, took to the skies for 90 minutes over Oxfordshire. What looked like a routine test flight in its outward appearance was ultimately deemed ground-breaking. Why? It was a world-first military transporter aircraft flight, and the first of any aircraft type in the UK to be completed using 100% sustainable jet fuel.

What are renewable fuels?
Renewable hydrocarbon biofuels (also called green or drop-in biofuels) are fuels produced from biomass sources through a variety of biological, thermal, and chemical processes. These products are chemically identical to petroleum gasoline, diesel, or jet fuel.
In other words, renewable fuels are sources of energy chemically identical to fossil fuels but produced from domestic, commercial, or agricultural waste (see Figure 1 below).
Figure 1: Converting waste into energy

Why the excitement?
Renewable fuels, like renewable diesel and sustainable jet fuel, can reduce greenhouse gas emissions by around 80-90% compared to fossil fuels. And because they burn much cleaner, engine filters remain cleaner for longer reducing the need for maintenance. Furthermore, given used cooking oil, vegetable oil, processing waste, and animal fat waste are used as inputs, the production of these fuels reduces biowaste, thereby cutting emissions from landfills.
This makes renewable fuels a key component of the circular economy. Humans have largely operated on the linear model historically when it comes to utilising natural resources. The circular model, in contrast, is much less wasteful and seeks to recycle as much as possible (see Figure 2 below).
Figure 2: The Circular Economy

The most exciting thing about renewable fuels is the immediacy with which they can make an impact. The reason why they are referred to as drop-in fuels is that they can replace fossil fuels in internal combustion engines with little or no modification required. So, if supply was abundant enough, forms of transport which cannot be electrified easily like heavy duty trucks, ships, and aeroplanes can be switched across to renewable fuels making a significant improvement to the environmental footprint. According to BP, “A return flight between London and San Francisco has a carbon footprint per economy ticket of nearly 1 tonne of CO2 equivalent. With the aviation industry expected to double to over 8 billion passengers by 2050, it is essential that we act to reduce aviation’s carbon emissions.”
The challenge
Renewable fuels or biofuels are still in their infancy. This means the obvious hurdle to overcome is cost competitiveness with fossil fuels. Cost estimates vary, but figures from the International Air Transport Association (IATA) provide a useful sense for the ballpark. In May 2022, IATA stated that the average worldwide price of jet fuel is about $4.15 per gallon compared to the US average price of a gallon of sustainable aviation fuel, which is about $8.67.
So, roughly double the price of the incumbent polluting technology. This is not a bad starting point at all. Considering how rapidly the cost of energy storage in batteries has fallen in the last decade, renewable fuels could become competitive quite soon if sufficient investment is made and economies of scale are achieved. IATA also predicts that renewable fuels could make up 2% of all aviation fuels by 2025, which could become a tipping point in their competitiveness.
Businesses are acting
Businesses pursuing their own net zero targets have already started exploring renewable fuels to minimise their waste. Darling Ingredients Inc, which produces its trademark Diamond Green Diesel from recycled animal fats, inedible corn oil, and used cooking oil, was chosen by fast food chain Chick-fil-A in March 2022 to turn its used cooking oil into clean transportation fuel.
Similarly, McDonald’s entered into a partnership with Neste Corporation in 2020 to convert its used vegetable oil into renewable diesel and fuel the trucks that make deliveries to its restaurants. According to TortoiseEcofin, both Darling Ingredients and Neste have a net negative carbon footprint given emissions produced by these businesses are lower that the emissions avoided because of their renewable fuels.
A final word
Renewable fuels alone will not tackle climate change. No single solution can. But they can help us make meaningful progress. The Intergovernmental Panel on Climate Change (IPCC) emphasises how crucial it is for the world to halve its greenhouse gas emissions this decade to at least have a chance of limiting global warming to 1.5oC. This means that solutions with an immediate effect have an important role to play. Biofuels can cut emissions from waste in landfills and provide much cleaner alternatives to fossil fuels to help accelerate the world’s decarbonisation efforts. They don’t require different engines to be of use. They just need funding to reach scale.
Mobeen Tahir, Director, Macroeconomic Research & Tactical Solutions, WisdomTree
Analys
SEB Metals Weekly: China Covid exit is bullish for metals

China Covid exit is bullish for metals
Softer inflation, slight macro-optimism, and China taking a rapid exit from Covid restrictions. Markets have become more optimistic. Inflation indices have eased and that has created some hopes that central banks won’t lift interest to a level that will kill the economy in 2023. Natural gas prices in Europe have fallen sharply. This has suddenly reduced energy-inflationary pressure and removed the direst downside economic risks for the region. But general market optimism is far from super-strong yet. The S&P 500 index has only gained 1.9% since our previous forecast on 1 Nov 2021, and oil prices are down nearly 10% in a reflection of concerns for global growth. China has however removed all Covid-restrictions almost overnight. It is now set to move out of its three years of Covid-19 isolation and lockdowns at record speed. Industrial metals are up 20% and the Hong Kong equity index is up 40% as a result (since 1 Nov-22). China’s sudden and rapid Covid-19 exit is plain and simply bullish for the Chinese economy to the point that mobility indices are already rebounding quickly. SEB’s general view is that inflation impulses will fade quickly. No need then for central banks across the world to kill the global economy with further extreme rate hikes. These developments have removed much of the downside price risks for metals in 2023 and we have to a large degree shifted our 2024 forecast to 2023.
Lower transparency, more geopolitics, more borders, and higher prices and exponential spikes. The first decade of this century was about emerging markets, the BRICs, the commodity price boom, the commodity investment boom, and free markets with free flow of commodities and labor with China and Russia hand in hand with western countries walking towards the future. High capex spending in the first decade led to plentiful supply and low prices for commodities from 2011 to 2020. A world of plenty, friends everywhere, free flow of everything, and no need to worry. The coming decade will likely be very different. Supply growth will struggle due to mediocre capex spending over the past 10 years. Prices will on average be significantly higher. There will be frequent exponential price spikes whenever demand hits supply barriers. Price transparency will be significantly reduced due to borders, taxes, sanctions, geopolitical alignments, and carbon intensities. Prices will be much less homogenous. Aluminium will no longer be just one price and one quality. Who made it, where was it made, where will it be consumed and what the carbon content will create a range of prices. Same for most other metals.
Copper: Struggling supply and China revival propel copper prices higher. Unrest in Peru is creating significant supply risks for copper as the country accounts for 10% of the global supply. Chile accounts for 27% of global production. Production there is disappointing with Codelco, the Chilean state-owned copper mining company, struggling to hit production targets. The Cobre Panama mine in Panama is at risk of being closed over a tax dispute between Quantum and the government. Cobre Panama is one of the biggest new mines globally over the past 10 years. The rapid exit from Covid restrictions in China is bullish for the Chinese economy and thus for copper demand and it has helped to propel prices higher along with the mentioned supply issues. The Chinese property market will continue to struggle, and it normally accounts for 20% of global copper demand while China accounted for 55% of global copper demand in 2021. While China is no longer prioritizing the housing market it is full speed ahead for solar, wind, EVs, and electrification in general. So, weakening Chinese copper demand from housing will likely be replaced by the new prioritized growth sectors. Global supply growth is likely going to be muted in the decade to come while demand growth will be somewhere between a normal 3% pa. to a strong 4% pa. to a very strong 5% pa. Copper prices will be high, and demand will hit the supply barrier repeatedly with exponential spikes as the world is working hard to accelerate the energy transition. Copper prices could easily spike to USD 15-16,000/ton nearest years.
Nickel: Tight high-quality nickel market but a surplus for a low-quality nickel. Nickel production is growing aggressively in Indonesia. The country is projected to account for 60-70% of global supply in 2030. This will become a huge and extremely concentrated geopolitical risk for the world’s consumers of nickel. Indonesia has an abundance of low-grade C2 nickel. The challenge is to convert low-quality C2 nickel to high-quality C1. We are set for a surplus of C2 nickel but the market for C1 nickel will depend strongly on the conversion capacity for C2 to C1. Low price transparency will also help to send prices flying between USD 20,000/ton and USD 30,000/ton. Strong growth in nickel production in Indonesia should initially call for prices down to USD 20,000/ton. But Indonesia is a price setter. It will account for 50% of global supply in 2023. It doesn’t make sense for Indonesia to kill the nickel price. If the nickel price drops, then Indonesia could quickly regulate supply. There should be a premium to nickel due to this. As a result, we expect the nickel price to average USD 24,000/ton in 2023. C2 to C1 conversion capacity may be strained and there should also be a monopoly premium due to the size of Indonesia. Converting C2 to C1 is however extremely carbon intensive and that could be an increasing issue in the years to come.
Zinc: Super-tight global market. European LME inventories are ZERO and zinc smelters there are still closed. European zinc smelters account for 16% of global zinc smelter capacity. Most of this was closed over the past year due to extremely high energy prices. European LME zinc stockpiles are now down to a stunning zero! The global zinc market is extremely tight. Reopening of European zinc smelting seems unlikely in H1-23 with a continued super-tight market as a result both in Europe and globally.
Aluminium: Price likely to be in the range of USD 2400 – 3200/ton and line with coal prices in China. Aluminium prices have historically been tightly tied to the price of coal. But coal prices have been all over the place since the start of 2021 with huge price differences between Amsterdam, Australia, and domestic Chinese coal prices which are now largely state-controlled. China banning imports of Australian coal, the Chinese energy crisis in 2021, and Russia’s invasion of Ukraine in 2022 are ingredients here. This sent aluminium prices flying high and low. Coal prices in China today imply a price of aluminium between USD 2400/ton and 3150/ton with the LME 3mth aluminium price nicely in between at USD 2590/ton. The global coal market should now become more orderly as China now again is accepting Australian coal. Energy costs have fallen sharply in Europe and some producers in the Netherlands have talked about possible restarts of production. China is likely to reduce its exports of primary aluminium. Energy security of supply is high on the agenda in China, and it makes no sense to emit lots of CO2 in China and indirectly export energy in the form of primary aluminium. Growth in non-China aluminium demand in the years to come will have to be covered by non-China producers which have the potential to force prices higher and away from coal as the price driver. While LME has one price for the 3mth aluminium price we’ll likely get larger and larger price differences across the world in the form of possibly extreme price premiums for example in the EU and the US.

Analys
Solid demand growth and strained supply to push Brent above USD 100/b


Brent crude had a strong end of the year as it traded at the highest level since 1 December. It is a slow start to the new year due to bank holidays and Dated Brent trades close to USD 85/b. It averaged USD 99.9/b in 2022. We expect it to average more than USD 100/b on average for the coming year amid strained supply and rebounding demand. Chinese oil demand is set to recover strongly along with re-openings while non-OECD will continue to move higher. At the moment oil looks absurdly cheap as it is cheaper than natural gas in both EU and Japan and also cheaper than coal in Australia.
Some price strength at the end of the year. The Dated Brent crude oil price index gained 2.3% on Friday with a close at USD 84.97/b. It was the highest close since 1 December. This morning it is trading slightly lower at USD 84.8/b but the market is basically void of action due to bank holidays.

Gloom and doom but IEA, OPEC and US EIA project global crude oil demand to rise between 1 m b/d and 2.2 m b/d YoY in 2023. They also expect call-on-OPEC to rise between 0.3 m b/d and 1.0 m b/d. The US EIA projects demand to increase 1 m b/d in 2023 on the back of a growth of 1.3 m b/d in non-OECD where demand in India rises by 0.2 m b/d and China by 0.6 m b/d. In China this is of course to a large degree due to re-opening after Covid-19 lock-downs. But it is still a good reminder of the low base of oil demand in non-OECD versus OECD. India last year consumed 5 m b/d which only amounts to 1.3 b/capita/year versus a world average of 4.5 b/capita/year and European demand of 10 b/capita/year. Even China is still below the world average as its demand in 2022 stood at 15.2 m b/d or 4.0 b/capita/yr. Non-OECD oil demand thus still has a long way to go in terms of oil demand and that is probably one of the things we’ll be reminded of in 2023 as Covid-19 lock-downs disappear entirely.
Solid demand growth in the face of strained supply. Important to remember is that the world has lost a huge amount of fossil supply from Russia due to the war in Ukraine. First in terms of natural gas where supply to the EU and thus to the world has declined by some 2.5 m boe/d versus pre-war levels. Secondly in terms of crude and products. The latter is of course a constant guessing game in terms of how much Russian crude and product exports has declined. The US EIA however projects that crude oil production in the Former Soviet Union will be down 2 m b/d in 2023 versus pre-Covid levels and down 1.3 m b/d YoY from 2022 to 2023. We are thus talking up to 4.5 m boe/d of lost supply from Russia/FSU. That is a huge loss. It is the reason why coal prices are still trading at USD 200 – 400/ton versus normal USD 85/ton as coal is an alternative to very expensive natural gas.
Overall for 2023 we are looking at a market where we’ll have huge losses in supply of fossil energy supply from Russia while demand for oil is set to rebound solidly (+1.0 – 2.2 m b/d) along with steady demand growth in non-OECD plus a jump in demand from China due to Covid-19 reopening. Need for oil from OPEC is set to rise by up to 1.0 m b/d YoY while the group’s spare capacity is close to exhausted.
We expect Brent crude to average more than USD 100/b in 2023. Despite all the macro economic gloom and doom due to inflation and rising interest rates we cannot help having a positive view for crude oil prices for the year to come due to the above reasons. The Dated Brent crude oil price index averaged USD 99.9/b in 2022. We think Brent crude will average more than USD 100/b in 2023. Oil is today absurdly cheap at USD 85/b. It is cheaper than both coal in Australia and natural gas both in Japan and the EU. This is something you hardly ever see. The energy market will work hard to consume more what is cheap (oil) and less of what is expensive (nat gas and coal).
Latest forecasts by IEA, OPEC and US EIA for oil demand growth and call-on-OPEC YoY for 2023. Solid demand growth and rising need for oil from OPEC.

Oil demand projections from the main agencies and estimated call-on-OPEC. More demand and higher need for oil from OPEC

EIA STEO projected change in oil demand for different countries and regions YoY to 2023

US EIA Dec STEO forecast for FSU oil production. Solid decline projected for 2023.

US commercial crude and product stocks still below normal

Total US crude and product stocks including SPR. Declining, declining, declining.

US crude and product inventories both excluding and including Strategic Petroleum Reserves

US oil sales from US SPR is now coming to an end. Will make the market feel much tighter as it really is.

Brent crude oil is absurdly cheap as it today trades below both Australian coal and natural gas in both Japan and the EU. Coal and natural gas prices should trade lower while oil should trade higher.

EU diesel prices versus natural gas prices. Could start to move towards a more natural price-balance in terms of substitution.

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Nyheter4 veckor ago
Oljepriset ser ut att vända uppåt i mars-april
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Nyheter1 vecka ago
Oljepriset lägre än intervallet där USA ska köpa tillbaka olja – över hela terminskurvan
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Nyheter7 dagar ago
Den stora oljeoptimisten Goldman Sachs tror inte längre på 100 USD-olja i år
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Nyheter4 veckor ago
Ryssland har stoppat oljeleveranserna till Polen via Druzhba-ledningen
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Nyheter1 vecka ago
Oman tar ett stort steg i att bli en stor producent av vätgas
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Nyheter3 veckor ago
Den sämsta apelsinskörden på 90 år i Florida
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Nyheter2 veckor ago
Företagare kan säkra kassan genom att köpa fysiskt guld
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Nyheter4 veckor ago
USA inför en enorm tull på rysk aluminium