Rates are moving on the back of strong numbers in the labor market, but energy is not finding a bid… yet? This week we wonder if there is life in energy after all.
Europe has seen some remarkable energy prices in recent days with record negative electricity prices in the North Western part of the continent, while Saudi Arabia strikes again and prolongs the supply cuts into August.
Energy markets remain calm despite a truly turbulent weekend in Russia. We look at the fundamentals of both Gas and Oil below.
Norges Bank finally made a decent attempt at underpinning the NOK, but the issue is that rates don’t really matter for the NOK. They matter a bit more for the SEK, which makes a SEK long tempting ahead of next week. Is the Scandi bloodbath over?
Welcome to the weekly Energy Cable! A lot of bearish demand chatter has been seen over the week but does it all add up? Meanwhile the Europeans have once again contained supply of Natural Gas. The interesting times in Energy continue. Tune in here!
Quick dive into the Swedish Real Estate market where variable rates in mortgages have proven especially spicy for households.
We are now experiencing a full-blown battle between Saudi Arabia and oil specs! Will Saudi Arabia get the upper hand or do they suffer from diminishing returns?
The battle between MBS and Biden seems to be intensifying and so far Saudi Arabia is struggling to get the upper hand. Will the OPEC+ supply cut prove to be a game changer for markets?
In short:
Watch out for the OPEC meeting this week as desperation can become the killer of solidarity, Easing energy pressures lending a helping hand to the EM space, Industrial metals screaming for more Chinese credit impulses
Will OPEC+ be able to rock the boat in energy markets again? Saudi Arabian budget break-evens are probably 5-7$ above current selling prices and MBS could be tempted to try and force the price higher again. The issue is that China is not playing ball and other OPEC+ members oppose further production cuts.
With weak economic data coming out of Germany expect internal pressures on the government to be hawkish on a European level to please its own disgruntled citizens and avoid losing voters.
While OPEC+ tries their best to prop up prices via cutbacks on supply, demand is evidently still not as strong as oil bulls would’ve liked. Will the Chinese momentum pick up and deplete reserves and will the turn of summer in the northern hemisphere counter such effects?
Even the scarcity of energy will probably not bring bullish price-action back to natural gas markets, while the outlook for oil is brighter. Can oil and gas crush the obstacles that they are faced with? Find out in this version of the energy cable, where Warren and I as usual don’t quite agree.
With German CPI being released today we have taken a deeper look into the wage negotiations in Germany, which might give a hint to how inflation dynamics will evolve in the future. Follow along in this short piece!
The banking-storm has calmed down a bit and the small banks’ share of total deposits has regained some territory in recent weeks. However, if fixed income losses continue to weigh down on balance sheets, then we cannot rule out more stories of banks in trouble. For now though, it would seem the FED intervention has idled the turmoil.
A new energy cable where we take oil under the loop given that the energy has been the best performing sector in the US month-to-date
Earnings season is kicking off today with big banks reporting today and Monday. We are taking the opportunity to look at big vs small cap on the back.
Happy Easter and welcome to the 15th edition of the most thorough energy newsletter in the World.
Our price models started turning bullish on oil just in time to catch parts of the positivity seen through the month of April and Energy stocks have started to climb the rankings on relative attractiveness of equity sectors rapidly these weeks.
With OPEC’s surprise cut of 1.15 mn. barrels, oil looks like a solid buy, meaning that the case from last week might turn out to be correct. But what about Natural Gas? Not quite the same story.
What happens when the curve steepens? It is bad good news for commodities, mixed news for equities and often temporarily good news for the USD except against JPY. Here is why..
The Energy Cable #11: Trust the plan Our price models are deteriorating under the surface. The oil and gas bull market is probably not around the corner. We look at risk/reward in the energy space in the context of the recessionary vibes stemming from the banking crisis. We know, we know … You are all focused on the banking drama in the US and its potential contagion to other markets. We wouldn’t want to let you down on a fresh Energy Cable, however we promise to be brief. Our latest model updates do not hint of a bull-market in energy around the corner. Rather the contrary. Let’s have a look at the risk/reward across oil, nat gas and metals in the context of the ongoing banking crisis. Steno Research: China bought as much energy as they usually do in 2022. Forget about the “reopening story” in Energy Loyal readers will know that we have remained very skeptical about the bullish outlook for energy on the back of the Chinese reopening. Lo and behold, we have some more data to back up that point. The ‘Europe is doomed once China starts to bid for LNG’ story has been the go to story by doomsday sayers and other charlatans but we just don’t see it. Firstly let’s just compare the Chinese demand for LNG imports with Japan. 2023 has seen Japanese demand converging towards Chinese. Moving on to the average LNG import by China. In a lockdown year China […]
Risk reward may be about to turn for parts of the European energy space after a land-slide in prices in recent quarters. Will margins increase this spring again? Let’s have a look at the details, while we wait for more data in oil space.
Greetings from Copenhagen everybody! It is Tuesday and that means another energy cable. Inventories are building, while jet fuel demand remains subdued compared to projections. In this update from 3Fourteen and Steno Research we take you through everything you need to know about current energy market trends and how to trade them.
Bearish inventories across both oil and natural gas and waiting for the Chinese reopening to show up! Here is the latest “Energy Cable” update on Natural Gas, Oil – and the overall energy complex with price signals and model based predictions. The only publication to cover this sector across geographies and asset classes. Enjoy!