Connect with us

Analys

SHB Råvarubrevet 13 januari 2012

Published

on

Handelsbanken - RåvarubrevetVetepriset på Matif stängde igår på en något högre nivå jämfört med förra torsdagen, trots gårdagens kraftiga fall orsakat av januari månads rapport från USDA – se nästa sida. Fallet blev klart större i USA och vetet i Chicago noteras ned sedan förra veckan. En fortsatt försvagning av euron i förhållande till den amerikanska dollarn har påverkat det europeiska vetets relativt bättre utveckling den senaste tiden.

amerikanska vetearealen justerades upp mer än väntat i gårdagens rapport, annars har vetet fortsatt att följa prisutvecklingen för majs och därmed väderutvecklingen i Sydamerika i väldigt hög grad under de senaste veckorna. Efter gårdagens rapport kommer fokus återigen riktas på väderutvecklingen i Sydamerika, vilken är svår att förutse.

Den australiensiska veteskörden är i stort sett klar, trots mycket regn uppges kvaliteten kunna bli något bättre än tidigare befarat. Den argentinska veteskörden är även den i stort sett klar, små regnskurar fördröjde skördearbetet något på slutet men utan större problem. För vetet i EU finns inga större skäl till oro, även om mer snö är önskvärt. Oron är dock större för vetet i Ukraina, som fortfarande även det har för lite snö, men vintern har hittills varit väldigt mild mot det ukrainska vetet med låga temperaturer. Hela 35 procent av höstvetet i Ukraina uppges dock vara i dåligt skick vilket kommer påverka framtida exportvolymer.

Vart vetepriserna är på väg är väldigt osäkert inte minst innan vintern är över och vi får en klar bild över grödornas skick, inte bara i Ukraina utan även i USA där höstvetet är i dåligt skick har dock vintern varit mild. Utan fortsatt torrt och varmt väder i Sydamerika, med stigande majs- och sojapriser som följd, är det i nuläget svårt att se högre vetepriser den närmaste tiden.

Vete - CBOT och Matif - DiagramVete - CBOT och Matif - Priser den 12 januari 2012

Majs

Terminspriserna på majs i Chicago har backat kraftigt sedan förra veckan, en nedgång som orsakades av gårdagens rapport från USDA i vilken siffrorna för utgående lager av majs i USA var klart högre än väntat – se nästa sida. Även utgående globala lager av majs justerades upp.

Efterfrågan på amerikansk majs har varit låg den senaste tiden, oro för minskande efterfrågan från etanolindustrin ger även det press nedåt. Uppgången veckorna innan gårdagens fall har i stort sett helt påverkats av torkan i Sydamerika, främst Argentina. Det har fallit en del regn men ej i tillräcklig mängd och dessutom något för sent i flera områden. Kommande prisutveckling lär under några veckor vara starkt beroende av den fortsatta väderutvecklingen i Argentina och Brasilien, vilken är väldigt svår att förutse.

USDA uppskattar den kommande argentinska majsskörden till 26 miljoner ton, de flesta sydamerikanska analytiker förväntar sig dock en skörd kring 23-25 miljoner ton – alltså klart lägre och risk finns att USDA underskattar torkans effekt. En hel del av detta bortfall bör dock kunna kompenseras av fodervete från andra delar av världen, vilket det finns gott om.

Lite längre fram kommer snart fokus riktas mot kommande sådd i USA, arealen spås av många bli den största någonsin som följd av höga priser – men konkurrens om arealen lär komma från sojabönor.

Prisdiagram på majs den 12 januari 2012Terminspriser på majs år 2012

Sojabönor

Terminspriserna på sojabönor har backat något sedan förra veckan, delvis som följd av viss nederbörd i torkdrabbade Sydamerika men framförallt följde sojabönorna med majsen ned efter USDA-rapporten igår – se nästa sida. Till våren vid tid för sådd i USA kommer de båda grödorna slåss om areal vilket gör att det finns en relativt stark koppling mellan grödornas pris. Under gårdagen backade dock priset på sojabönor klart mindre än majsen med omkring 2 procent jämfört med majsens fall på ungefär 6 procent.

Vädret i Sydamerika har varit under stort fokus under flera veckor nu och lär vara så i flera veckor till. USDA:s nedjustering av den argentinska sojaproduktionen blev klart mindre än många väntat med blygsamma 1,5 miljoner ton – flera sydamerikanska analytiker uppskattar att torkan hittills skapat en skördeförlust på uppemot 6 miljoner ton. Förvånande är kanske också USDA:s nedjustering på 1 miljon ton av den brasilianska skörden, flera analytiker hävdar att en nedjustering med omkring 5 miljoner ton vore mer korrekt. I den näst största sojaproducerande delstaten i Brasilien, Parana, bedöms endast 57 procent av grödan vara i bra skick, att jämföra med 95 procent en månad tidigare.

Den kritiska perioden för sojabönor i Argentina ligger några veckor fram i tiden, men i Brasilien har alltså en ganska kraftig skada redan skett – vilket kanske i alla fall USDA inte riktigt tagit på allvar. Det har fallit en del regn den senaste tiden, men de brasilianska lantbrukarna har lärt sig att inte ta ut segern i förskott – det regnar alltid något, även under riktigt torra år.

Kommande prisutveckling är under en ganska lång tid främst beroende av väderutvecklingen i Sydamerika, vilken är väldigt svårbedömd.

Prisdiagram över sojabönor den 12 januari 2012Terminskurva över sojabönor den 12 januari 2012

Kaffe

Under 2011 rörde sig kaffepriset mellan ett intervall av 210,95 – 304,90 USd/Ib och ser man till prisutvecklingen från årets början så har kaffe rört sig ned 3-4 procent och stängde innan årets slut på 226,85 USd/Ib.

Hittills har avkastningen från Centralamerika varit en besvikelse, trots att den Mexikanska produktionen visat sig vara stark. Lägre produktion väntas från Colombia om regnet fortsätter. De extrema väderförhållandena som råder i de kaffeproducerande områdena just nu kan komma att påverka kaffeproduktionen för det kommande året.

Det spekuleras om att Brasilien, världens största kaffeproducent, inte kommer att kunna möta den inhemska efterfrågan och den förväntade exporten trots rekordskörd i år. Detta har fått kaffepriset att studsa upp de senaste veckorna. 90 procent av den vietnamesiska skörden har skördats hittills men endast 20-25 procent av bönorna har sålts. Normalt för perioden är att hälften av bönorna ska ha släpps ut på marknaden. Orsaken till detta är att de vietnamesiska bönorna håller tillbaka försäljningen för att pressa upp priserna ytterligare.

Pris på kaffe - Diagram den 12 januari 2012

Kakao

Kakaopriset rörde sig mellan ett intervall av $3774 -1936/ton under 2011. Kakaopriset stängde på $2109/ton vid årets slut, en nedgång med ca 40 procent sedan årets början. Goda väderförhållanden, globalt överskott och lägre konsumtion av kakao samt det svaga ekonomiska läget i världen har lett till att kakao tillhört de råvaror med sämst prisutveckling under förra året.

Under veckan har vi kunnat ta del av rapporter om strejk i Nigeria, världens fjärde största kakaoproducent. Marknaden är orolig för produktionsstörningar i området. Torrt väder kring Elfenbenskusten under de senaste veckorna och signaler om en ökad efterfrågan från Europa har varit några av orsakerna som drivit upp kakaopriset kraftigt.

Prisutveckling för kakao från år 2010 till 2012

Kakao terminskurva

Terminskurva för kakao den 12 januari 2012

Bomull

2011 rörde sig bomullspriset mellan ett intervall av 85,12 – 215,15 USd/Ib. Priset har fallit med drygt 55 procent sedan årshögsta och stängde vid årets slut på 91,80 USd/Ib.

Världskonsumtionen av bomull förväntas falla med 2,5 procent från förra säsongen som en följd av den tröga globala ekonomin medan den globala bomullsproduktionen väntas stiga 7 procent till rekordhöga 123,4 miljoner bales (1 bale = 218 kg), enligt USDA’s rapport för 2011/2012 som släpptes 12 december. Australiens produktion väntas stiga 19 procent, medan Brasiliens produktion väntas vara oförändrad. Kina, världens ledande bomullsproducent, väntas odla 10 procent mer bomull jämfört med förra året. Indien och Pakistan väntas öka sin produktion med 8 respektive 14 procent. Den amerikanska skörden 2011/2012 väntas sjunka med 13 procent jämfört med förra året. Den globala exporten för 2011/2012 väntas stiga 3 procent från förra året, i huvudsak p.g.a. den förväntade stigande produktionen. Kinas import, världens största importör av bomull, väntas stiga med hela 29 procent från tidigare år, detta som en följd av att Kina har importerat markant den senaste tiden för att nå sina mål av lagernivå, annars väntas importen hos flera importerade länder att falla.

Sedan årsskiftet har bomullspriset dock stigit något baserat på spekulationer om ökad efterfrågan som en följd av ett lugnare ekonomiskt läge. En annan faktor som varit orsaken till prisrallyt är det torra vädret i Sydamerika och i Texas. Annars har fonder ombalanserat sina portföljer och utökat sina bomullsinnehav. Marknaden oroar sig över ett andra år av minskad efterfrågan om det globala ekonomiska situationen förvärras.

Prisutveckling på bomull fram till den 12 januari 2012

Terminskurva för bomull den 12 januari 2012

[box]SHB Råvarubrevet är producerat av Handelsbanken och publiceras i samarbete och med tillstånd på Råvarumarknaden.se[/box]

Ansvarsbegränsning

Detta material är producerat av Svenska Handelsbanken AB (publ) i fortsättningen kallad Handelsbanken. De som arbetar med innehållet är inte analytiker och materialet är inte oberoende investeringsanalys. Innehållet är uteslutande avsett för kunder i Sverige. Syftet är att ge en allmän information till Handelsbankens kunder och utgör inte ett personligt investeringsråd eller en personlig rekommendation. Informationen ska inte ensamt utgöra underlag för investeringsbeslut. Kunder bör inhämta råd från sina rådgivare och basera sina investeringsbeslut utifrån egen erfarenhet.

Informationen i materialet kan ändras och också avvika från de åsikter som uttrycks i oberoende investeringsanalyser från Handelsbanken. Informationen grundar sig på allmänt tillgänglig information och är hämtad från källor som bedöms som tillförlitliga, men riktigheten kan inte garanteras och informationen kan vara ofullständig eller nedkortad. Ingen del av förslaget får reproduceras eller distribueras till någon annan person utan att Handelsbanken dessförinnan lämnat sitt skriftliga medgivande. Handelsbanken ansvarar inte för att materialet används på ett sätt som strider mot förbudet mot vidarebefordran eller offentliggörs i strid med bankens regler.

Continue Reading
Click to comment

Leave a Reply

Din e-postadress kommer inte publiceras. Obligatoriska fält är märkta *

Analys

How renewable fuels are accelerating the decarbonisation of transport

Published

on

WisdomTree

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.  

Mobeen Tahir, Director, Macroeconomic Research & Tactical Solutions, WisdomTree
Mobeen Tahir, Director, Macroeconomic Research & Tactical Solutions, WisdomTree

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

Waste types and refinery output

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

Circular economy
Source: WisdomTree, Ellen MacArthur Foundation, 2023

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

Continue Reading

Analys

SEB Metals Weekly: China Covid exit is bullish for metals

Published

on

SEB - analysbrev på råvaror

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.

SEB Commodities price outlook
Source: SEB Markets – Commodities. Historical data: Bloomberg 
Continue Reading

Analys

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

Published

on

SEB - analysbrev på råvaror
SEB - Prognoser på råvaror - Commodity

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.

Bjarne Schieldrop, Chief analyst commodities at SEB
Bjarne Schieldrop, Chief analyst commodities, SEB

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. 

Latest forecasts by IEA, OPEC and US EIA for oil demand growth and call-on-OPEC YoY for 2023.
Source: IEA, EIA, OPEC, SEB graph

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

Oil demand projections
Source: IEA, EIA, OPEC, SEB table

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

EIA STEO projected change in oil demand for different countries and regions YoY to 2023
Source: US EIA, SEB graph

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

US EIA Dec STEO forecast for FSU oil production. Solid decline projected for 2023.
Source: US EIA data and projection. SEB graph

US commercial crude and product stocks still below normal

US commercial crude and product stocks still below normal
Source: US EIA, SEB graph

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

Total US crude and product stocks including SPR. Declining, declining, declining.
Source: US EIA, SEB graph

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

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.

US oil sales from US SPR is now coming to an end. Will make the market feel much tighter as it really is.
Source: US EIA, SEB graph

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.

Source: Blbrg data, SEB graph

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

EU diesel prices versus natural gas prices. Could start to move towards a more natural price-balance in terms of substitution.
Source: Blbrg data, SEB graph and calculations
Continue Reading

Populära