Macro analysis of the global oil markets to distill the evolving risks and opportunities for energy industry stakeholders and wealth managers.
Case studies, research and analysis tailored to meet government policy as well as business needs. Specializing in market trends, commodity pricing, deregulation.
Connecting the dots between fundamentals, economics, financial markets, regulatory and policy changes, demographics, geopolitics and more.
Crude remains rangebound; Ukraine risk premium holds a floor - Nov. 21, 2024
Trump win neutral for crude but bearishness lurks in the wings - Nov. 8, 2024
It was a big week for markets, packing the US presidential election and the Fed decision, but the crude complex went “meh”.
The outcome of the US election, which handed Donald Trump a thumping victory over rival Kamala Harris, was highly unpredictable, while the Fed decision, a rate cut of 25 basis points, was entirely predictable.
Not surprisingly, the financial markets reacted in a big way to the election outcome across stocks, bonds, gold and the US dollar, while the Fed elicited barely any response, other than perhaps prompting some relief that there were no rude shocks, nothing to spoil investors’ post-election party.
The pricing in of Trump’s win that rippled across major risk assets hardly disturbed the oil complex. Though Trump 2.0 has implications for global oil macros – more on the international scene than via domestic policies – it is too early to assess the net impact on supply-demand balances as net bullish or bearish.
In today’s issue, we weigh in on the three key areas to watch for changes under the new administration, with the caveat that these are preliminary readings:
Nov 2024: Mildly bearish near-term, neutral end-Nov/early Dec - Nov. 18, 2024
After weighing the bullish and bearish factors for crude on the horizon, we conclude:
US joins a battlefield of paper tigers with new Iran oil sanctions - April 24, 2024
This is our second Executive Briefing Note in a week. This publication is designed to provide prompt and succinct views on major market developments outside the cycle of our regular weekly report, the Oil Viewsletter.
The US Senate, the upper house of the Congress, late-Tuesday passed a package of bills that includes a “Stop Harboring Iranian Petroleum” or SHIP Act, which expands secondary sanctions against Iranian oil exports by targeting ports, ships and refiners that facilitate the transfer of or process oil from the Islamic Republic. The House had passed the bill last Saturday and President Joe Biden is expected to sign it in the coming hours.
What impact might this Act have on Iran’s 3 million b/d of crude production and 1.3-1.5 million b/d of crude exports? Probably none, in our assessment. Which is why we call it the third paper tiger in the Israel-US-Iran geopolitical battle.
OIL IN 2024: Easing demand to weigh on crude, test OPEC+ unity - Dec. 22, 2023
As oil market participants turn the page into 2024, they are contemplating a picture of a global economic slowdown crimping demand growth, even as robust output growth from the US and a few other producers outside the OPEC/non-OPEC alliance tilt the balance towards oversupply.
Questions are swirling around the survival of OPEC+ and its supply management strategy in the face of new challenges awaiting it in the coming months. As Angola’s decision to quit OPEC this week shows, under the veneer of cohesion in the 22-member group, cracks are likely widening, especially on account of members who have lost substantial production capacity after effecting the deepest cuts ever through the Covid-induced demand destruction.
What else does the crystal ball show for the oil market in 2024? Sweet crude prices averaged 18% lower this year, bringing relief from last year’s 40% annual jump. What might next year look like?
We highlight the key elements to keep an eye on and take a closer look at the characteristics of the three main components of next year’s market: Supply, Demand and the Economy.
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