Saudi Arabia once again attempts to gain the upper hand in the oil-market. There is no doubt that the frosty relationship between MBS and Biden plays a part in the ongoing oil-tango, but will Saudi Arabia succeed? We doubt it.
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.
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?
The Chinese comeback is still very services based, which has proven to be an issue for the energy bull case. Will the Chinese momentum be reignited in H2 and where does it leave the energy space?
Weeeeehoooooooooooo! Inflation is finally truly waning, but have we forgotten about the reason why inflation is declining? Disinflation is only mana from heaven for so long and the USD funding market stress looms!
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.
How do we approach the most anticipated recession in newer history when the labor market keeps holding up? And how severe is the banking crisis in a historical context? We aim at providing you with the answers here.
Few markets have shown ambiguity like energy markets have, and the ghost of 2022 still haunts many investors deterring them pulling the trigger. Is a sequel brewing, or will the deterioration continue? We present to you two different takes on the matter.
The recent slide in oil prices is interesting given how many fundamentals supported the notion of higher prices. Is this a temporary setback for the oil bulls? And how will Nat Gas fare in this environment?
With the banking turmoil leaving the headlines (for now), we turn our attention towards the main themes in the broader macro landscape. What’s going on with inflation? What will the Fed do? Is oil turning bullish? And what about Japan? As always we keep you updated on the 5 biggest themes of the week. Enjoy!
It is show- time for inflation but the sudden lack of interest in inflation is striking. The “street” whisper clearly expects a hot core inflation number, which makes us lean dovish for the report.
Will Biden strike back on OPEC+ with an SPR release this week? We watch the EIAs short-term energy outlook today ahead of an interesting inflation week.
With the banking turmoil fading a bit, we thought we’d turn some of our attention elsewhere. It’s not like there is a lack of things to cover in global macro. Once again, we present our timeliest findings and assess how to interpret them.
The RBNZ did a major hawkish move by lifting the policy rate by 50bps. G10 rates still look peakish across the board despite the recent repricing of oil.
Is the massive OPEC+ cut bullish for oil? Or will the price action resemble former supply cuts? Empirical data suggests that it is not bullish oil, but a recession is needed to bring oil lower now.
Energy has been one of the clear victims of the banking stress, but a more positive outlook may re-surface once the dust settles. Is it time to get upbeat on oil prices? Andreas and Warren disagree.
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.
China actively uses its reserves to fight price trends and currently BOTH the US and China release reserves simultaneously. This is more than enough to counter Russian production cuts. Here is why!
The Chinese reopening has possibly been the most covered topic since its announcement in late 2022 – at least in financial circles. The awaited lifebuoy for the global economy, which the reopening consensually was thought to be, has yet to truly show up in prices of commodities essential in manufacturing. We prefer to stay long Industrial Metals (mainly Copper) relative to Energy.
ONE WEEK until “The Most Important Election of the Year”. Young disenfranchised Nigerians hope that outsider, Peter Obi, can shake-up a Nigerian democratic system in decline. Will he win, and what would that mean for Africa’s most populous country?
Is Russia back in the driver’s seat after the supply cut announced late last week? If China adds demand, while Russia cuts supply, it may be a bullish cocktail for energy.. But so far the truly bullish price action remains to be seen.
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!
Norges Bank is once again caught behind the curve in its FX management policy due to the landslide in Natural Gas prices. Unless Norges Bank immediately stops selling as many NOKs per day, the NOK selling pressure is likely going to continue.
We have taken a look at technicals in the oil market. Is it voodoo or magic? We also update our price signals for oil and natural gas. Time to buy? Enjoy!
Energy has been THE performer of 2022, but is there any energy left in the trade as commodity markets are turning bearish? We look at price action and fundamentals underlying the consensus trade #1
In my base-case, we are going to see a double-top inflation picture, but I sincerely hope that we don’t resummon our inner financial illiterates, if rates drop towards 0% due to temporary disinflation
If electricity becomes a scarce commodity, it is important to note who’s on top of the situation and who’s not. Here is the answer and how it plays into my portfolio thoughts.