Analys
SHB Råvarubrevet 7 mars 2014
Händelserik vecka ligger bakom oss
Veckan med stort ”V” har passerat. Efter en period då amerikansk data varit störd av den urkalla vintern och Kinesisk dito störts av nyårsledigheten så anlände ny data i de viktigaste serierna. Kinesiska inköpschefer fortsätter i moll även om PMI siffran var något bättre än väntat. USA:s inköpschefer var något gladare än i januari men nivån har kommit ner betydligt från fjärde kvartalet under förra året då data konsekvent var bättre än väntat. Fortfarande är den generella synen att den kalla vintern i USA har påverkat indikatorerna men vi tror att utöver det så kommer den amerikanska ekonomin att växa något långsammare än tidigare förväntat.
Råvarorna inledde veckan med skarp uppgång i Ryssland och Ukraina påverkade råvarorna, olja, vete, guld och naturgas. När Putins aggression klingade av redan under tisdagen så föll råvarorna tillbaka igen. I skrivande stund är polariseringen mellan hur stora ord politikerna använder för att beskriva krisen och den ickehändelse den blivit på finansmarknaderna slående. Det är svårt att måla upp ett scenario där den geopolitiska oron ska driva råvarorna högre när Putin tagit ett steg tillbaka. Vi väntar med spänning på importdata för råvaror från Kina imorgon lördag, särskilt då data för januari visade på högsta importen någonsin för järnmalm, olja och koppar.
Riskerna inför dagens nonfarm payrolls siffra var på nedsidan. Detta då vi tidigare i veckan fick svagare sysselsättningsförändring (ADP) än väntat. Utfallet idag på 175k (mot väntade 149k) från 129k i januari överraskade positivt och talar för att senaste månadernas svaga utfall varit väderrelaterat. Sammantaget har sannolikheten för att vi sett början på en konjunkturinbromsning i amerikansk ekonomi minskat.
Guldet steg i måndags efter helgens utveckling i Ukraina, men redan i mitten på veckan hade uppgången raderats ut. I vår kommentar i måndags på utvecklingen skrev vi att vi fortfarande är positiva på guldet, men att vi inte såg anledning till att öka positionerna just då. Som vi beskriver i TV-inslaget i EFN så ser vi nu möjlighet till en fortsatt uppgång med lite mer kraft, givet att det inte blir en snabb lösning på Ukrainasituationen. En mer successiv uppbyggnad av riskpremier är det mesta rationella i denna miljö, vilket gör att vi stärker vår positiva syn på guldet tillsvidare.
Våra ”key calls” kaffe och nickel rusar vidare mot nya höjder och vi understyker att trots stor uppgång i kaffe så tror vi att det finns uppsida kvar. Mars månad är även den väderkänslig för kaffeodlingarna i Brasilien och före rapporter på skadorna börjar sprida sig är oron vanligtvis som störst i utbudsstörda råvarurallyn. I veckan har kaffepriset nått två årshögsta och brutit 2 dollar/Ib nivån. Även fysiska kaffehandlare bekräftar i veckan om sin vy om fortsatt stigande kaffepriser.
Med anledning av situationen i Ukraina och Ryssland, som viktiga aktörer på råvarumarknaden, finns nu ett TV-inslag med Handelsbankens Råvaruchef Magnus Strömer.
Analys
OPEC takes center stage, but China’s recovery remains key
After gaining USD 2.6 per barrel from Tuesday until midday Wednesday, Brent crude prices lost momentum yesterday evening, plunging by USD 2 per barrel to the current level of USD 72.3 per barrel. This marked a significant and counterintuitive move just hours ahead of today’s OPEC+ meeting at 12:00 PM CEST, where the market largely anticipates a rollover agreement. OPEC+ is expected to maintain its current supply cuts, refraining from adding additional volumes to the market for now.
The USD 2 per barrel drop was partly driven by a single market player – a U.S. bank – that sold a massive volume of U.S. oil futures during the evening (CEST), pushing prices lower and leaving traders scrambling to interpret the rationale. According to Reuters, the unidentified bank sold over USD 270 million worth of U.S. oil futures.
The market consensus is now that OPEC+ is likely to extend its most recent round of production cuts by at least three months starting in January. This move would provide additional support to the oil market, even though OPEC+ had hoped to gradually phase out supply cuts next year. For now, there appears to be little room for additional OPEC+ volumes in a market still grappling with weak demand.
At 16:30 CEST yesterday, the oil market received a bullish U.S. inventory report. Commercial crude oil inventories (excl. the SPR) fell by a substantial 5.1 million barrels to 423.4 million barrels, about 5% below the five-year average for this time of year. This decline was a stark contrast to the API’s earlier forecast of a 1.2-million-barrel build in crude inventories.
For gasoline, inventories increased by 2.4 million barrels (API forecast: +4.6 million) but remain 4% below the five-year average. Distillate (diesel) fuel inventories rose by 3.4 million barrels (API forecast: +1 million) but are still 5% below the five-year average.
U.S. crude oil refinery inputs averaged 16.9 million barrels per day, up 615,000 barrels per day from the previous week. While refineries operated at 93.3% of their capacity. Gasoline production declined to 9.5 million barrels per day, while distillate fuel production increased to 5.3 million barrels per day.
Over the past four weeks, total products supplied – a proxy for implied demand – averaged 20.4 million barrels per day, a 4.0% increase compared to the same period last year. Key metrics include gasoline demand at 8.8 million barrels per day, up 2.8%; distillate demand at 3.7 million barrels per day, consistent with last year; and jet fuel demand up 7.1% year-over-year.
Overall, the report was bullish, reinforcing expectations of a tightening market.
Attention now shifts to OPEC+, geopolitics (including the Russia-Ukraine conflict, Middle East tensions, and Iranian sanctions), and global demand, particularly in China. Weak demand in China throughout 2024 pushed global oil prices downward, especially in the second half of the year. However, we believe the narrative is shifting(!)
China appears to be stabilizing and showing signs of recovery. Manufacturing PMI has ticked higher, and the economic surprise index has also improved. As the world’s largest oil importer, China turning the corner is a significant positive development. This strengthens our view of limited downside risks to oil prices as we head into 2025. While caution remains warranted, we continue to favor a long position on Brent crude.
Analys
Further US sanctions on Iran spark largest oil price surge in three weeks
Since yesterday morning, Brent crude prices have climbed by ish USD 2 per barrel, recovering to the current level of USD 73.9 per barrel. This represents a significant price movement over a short period and marks the largest such increase since mid-November.
Market whispers suggest that OPEC+ is likely to announce a deal to further delay the planned supply increase during their meeting scheduled for tomorrow (December 5th). Concerns about weaker global demand in the coming year leave little room for additional OPEC+ supply, compelling the cartel to exercise patience in its efforts to regain market share.
Adding to the upward pressure on crude prices, the U.S. has escalated its sanctions on Iran, targeting the country’s vital oil sector – a critical source of revenue.
Yesterday (December 3rd), the U.S. imposed sanctions on 35 entities and vessels associated with Iran’s ”shadow fleet,” which secretly transports Iranian oil. These operations rely on fraudulent practices such as falsified documentation, manipulated tracking systems, and frequent changes of ship names and flags. This move builds upon earlier sanctions, including those introduced in October this year, which restricted transactions involving Iranian petroleum and petrochemical products.
According to the U.S. Department of State, the latest measures aim to further disrupt Iran’s ability to finance activities deemed destabilizing in the Middle East, including its nuclear program and support for regional proxies.
From a market perspective, Iran’s crude oil and condensate exports reached roughly 1.7 million barrels per day in May 2024, the highest level in five years. China, as Iran’s largest importer, accounted for ish 490k barrels per day of these exports in 2023. The newly imposed sanctions could lead to a substantial reduction in Iran’s oil exports, potentially cutting up to 1 million barrels per day, depending on the enforcement’s strictness and global compliance.
Iranian crude exports to China have increased this year, but the sanctions may compel Chinese firms to reduce or halt purchases to avoid U.S. penalties. This would likely drive a search for alternative crude sources to sustain China’s refining operations, thereby adding further support to the current upward pressure on crude prices. This, together with the likelihood of OPEC+ continuing to delay their planned production increase, reinforces our view of limited downside risks to prices in the near term – caution remains reasonable, and we continue to favor a cautiously long position.
Analys
Crude prices steady amid OPEC+ uncertainty and geopolitical calm
Since last Friday’s opening at USD 73.1 per barrel, Brent crude prices have steadily declined over the weekend, with further losses on Monday afternoon following a brief recovery that saw prices approach USD 73 per barrel. As of this morning (Tuesday), Brent crude is inching upward again, currently trading at USD 72.2 per barrel. Over the past week, implied volatility has dropped to its lowest levels in roughly two months, as the upward momentum observed since mid-November has temporarily stalled.
On a bearish note, reduced geopolitical uncertainty in the Middle East has contributed to easing the risk premium in oil prices. Israel has signaled its intention to uphold the current ceasefire despite launching airstrikes in Lebanon in response to Hezbollah’s first attack under the truce. While this de-escalation has softened prices, the attacks during the ceasefire highlight that tensions in the region are far from resolved. This persistent instability will likely remain a source of uncertainty for oil markets in the weeks ahead.
On the bullish side, the OPEC+ supply meeting, rescheduled to Thursday, December 5th, looms. Additionally, expectations are building for increased Chinese stimulus measures, potentially to be unveiled at the Chinese Central Economic Work Conference next Wednesday. This closed-door meeting is expected to outline key economic targets and stimulus plans for 2025, which could provide fresh support for Chinese oil demand.
From a supply perspective, OPEC+ has added to market uncertainty by postponing its meeting, initially planned for Sunday, December 1st. The group will decide whether to reintroduce production cuts or proceed with a scheduled supply increase of 180,000 barrels per day. Current market sentiment suggests that OPEC+ is unlikely to rush into restoring production, reflecting cautiousness amid subdued global demand and concerns about a potential supply glut in 2024.
Market participants and traders widely anticipate that the cartel will maintain its wait-and-see approach to avoid worsening the fragile market balance. Such cautiousness could lend support to prices as the new year approaches. We believe OPEC+ is acutely aware of the risks associated with oversupplying the market and will likely act to stabilize prices rather than jeopardize them.
Looking ahead, fundamentals such as U.S. inventory levels, geopolitical developments, and OPEC+ decisions will remain key drivers of the crude oil market. These factors will shape the outlook as we move into the final weeks of 2024 and entering 2025.
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