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Commodity Tracker: 5 charts to watch this week

4 days ago

How is energy demand faring across different sectors and regions amid the evolving coronavirus pandemic? In this week’s Commodity Tracker, S&P Global Platts editors look at global aviation, Chinese fuels consumption, Brazilian power demand and European refining, as well as US LNG output.

1. Lift in air travel helps jet fuel but demand still far from normal
 
What’s happening? Global aviation continues to recover and global kerosene/jet fuel demand is tracking the pattern closely. Even so, global flights are still running only 61% of pre-pandemic norms, with international travel lagging the recovery in domestic travel. China’s domestic air travel has largely normalized back to pre-pandemic norms. Recovery of flights in developing countries, such as Brazil and India, has lagged the recovery

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Commodity Tracker: 6 charts to watch this week

11 days ago

Libyan oil flows have resumed but their stability remains uncertain, while India’s coal powered generation has dipped, granting gains to renewables. S&P Global Platts editors and analysts also discuss the latest Chinese actions on coal imports, Norwegian gas flows to Europe, and separate challenges faced by power markets in the UK and California.

1. Libya’s fragile oil return complicates market outlook
 
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What’s happening? Light sweet Libyan crude is starting to trickle through after an eight-month hiatus as rival groups agreed a tentative truce. The prospect of over 1 million b/d hitting the market in the coming months coincides with a brittle demand outlook amid a second wave of coronavirus infections.
What’s next? Libya’s crude output is poised to rise to over 500,000

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Commodity Tracker: 5 charts to watch this week

18 days ago

The global oil supply path into 2021 is in focus this week, along with the impact of storms on US  oil output. Away from oil, we also survey they outlook for LNG demand in Asia and the European power mix, and look at the key factors driving the copper market.

1. OPEC+ compliance, Libya output to drive global oil supply growth in Q4
 

What’s happening? Global oil supply has increased by 3.6 million b/d from July through September after dropping more than 13 million b/d from April to June. This is despite a more active hurricane season in the US Gulf, which has temporarily removed upwards of 100,000 b/d of crude oil production. OPEC+ has carefully managed providing additional barrels to the market as oil demand has recovered from peak pandemic impacts seen in Q2.
What’s Next? Supply

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Commodity Tracker: 4 charts to watch this week

25 days ago

This week’s Commodity Tracker kicks off with a look at easing stocks of refined oil products at the Middle East’s biggest storage hub of Fujairah, as well as the prospects for gas supply in Europe over winter amid bulging storages. The return of 2.7 GW of capacity to the German and Dutch power markets goes some way to easing fears of shortages with French nuclear capacity low, and European steel plants are eyeing up improved margins for 2021.

1. Fujairah oil stocks drop to eight-month low as market rebalances
 

What’s happening? Stockpiles of refined oil products at Fujairah, the Middle East’s biggest storage hub, have hit an eight-month low, with shipments of naphtha and gasoil picking up, supporting signs that the global oil market is balancing as OPEC+ output cuts offset pandemic-hit

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Commodity Tracker: 5 charts to watch this week

September 28, 2020

This week’s selection of key talking points from S&P Global Platts news editors looks at how Saudi Arabia faces ballooning crude stockpiles caused by poor demand in Asia. Meanwhile, the political saga surrounding the Nord Stream 2 pipeline shows no sign of abating, Asia’s aviation industry remains in the doldrums, UK gas plant margins are looking up, and the recovery in US LNG exports continues apace.

1. Saudi oil stocks near five-month high amid weak Asian refining margins

What’s happening? Saudi Arabia’s domestic crude oil stockpiles have climbed to their highest since the coronavirus pandemic hit the market hard in April, with analysts saying Asian refineries are struggling to keep up with term commitments. Saudi crude stockpiles were 78 million barrels as of Sept. 23, the highest

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Commodity Tracker: 4 charts to watch this week

September 21, 2020

A hike in rhodium prices, South Korean nuclear availability and European power prices are all in the mix in this week’s selection of trends to watch in energy and raw materials markets.

1. Will supply-constrained rhodium see more upside after all-time high?
 

What’s happening? After a period of lower prices in the first and second quarter of 2020 as lockdowns and low automotive production weighed on demand, the rhodium market once again picked up the bullish streak seen early this year. The base price climbed to an all-time high of $14,500/oz on September 16, before falling back in the following days.
What’s next? The latest rally was caused by anticipated supply shortages from South Africa, which accounts for around 80% of global rhodium mine supply, strong buying ahead of the

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Commodity Tracker: 5 charts to watch this week

September 14, 2020

As the 36th Asia-Pacific Petroleum Conference (APPEC) opens, this week’s Tracker kicks off with a look at Saudi crude oil pricing into Asia. In Europe, meanwhile, steel prices are recovering, and carbon emission allowances face a volatile period amid legislative change.

1. Largest Saudi crude OSP cuts are to Asia; headwinds to higher exports remain
 

 
What’s happening? Saudi Aramco cut Official Selling Prices (OSPs) to nearly all regions on low refining margins and weak market structures, but more than S&P Global Platts Analytics expected prior to the release. OSPs to Asia were cut by $0.9-$1.5/b on the month, more than the cuts to OSPs for US and Europe. The price into Asia was more than the market metrics of 51 cents/b suggested by the change of the Dubai M1-M3 spread, month-on-month,

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Commodity Tracker: 5 charts to watch this week

September 7, 2020

California’s power market feels pressure from extreme high temperatures in this week’s selection of energy and commodities trends to watch. Plus, EU gas vs coal power generation, the link between crude oil and US inflation, and more.

1. Extreme California heat boosting power demand, prices 
 

What’s happening? The California Independent System Operator imposed restrictions on maintenance September 5-6 with demand forecast to top 40 GW and temperatures forecast to reach as high as 118 degrees Fahrenheit even as the region continues to battle numerous wildfires. Spot power prices spiked, with peakload and temperatures forecast to climb. Pricing point SP15 on-peak day-ahead for September 3-4 traded around $75/MWh on the Intercontinental Exchange September 2, a 135% jump day on day compared

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Commodity Tracker: 4 charts to watch this week

August 24, 2020

US drilling activity has top billing in S&P Global Platts editors’ pick of commodities trends this week. Plus, LNG netbacks, China-US energy trade, and EU carbon prices.

1. Permian oil rig count reaches 11-year low
 
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What’s happening? Permian Basin oil rigs dropped by one to 128 rigs in the week ending August 19, marking an 11-year low, according to data from Enverus. Overall, the US oil and gas rig count was up one to 289 in the same week. The decline in the Permian rig count has slowed but has been dramatic: in the first week of March 428 rigs – 300 more than currently – were working in the basin. Although the Permian is the largest US oil producing basin and viewed as one of the most economic, upstream operators are being prudent amid low crude prices caused by the

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Commodity Tracker: 6 charts to watch this week

August 17, 2020

Recovery in two metals markets – steel and cobalt – tops S&P Global Platts editors’ pick of themes to watch this week. Plus, Middle East oil products, European gas sector summer maintenance and coal-fired generation margins.

1. Steel prices tell story of two-tier recovery in Europe and China
 

What’s happening?  An upward trend in Chinese and German domestic hot rolled steel coil (HRC) prices indicates market recovery from COVID-19-related restrictions in both countries, but at quite different paces. China domestic HRC prices show a classic V-shaped recovery on a stimulus-fueled resumption of steel-consuming activities, which has brought Chinese steel prices up by around $100/mt since the start of May. German domestic HRC prices meanwhile show a more gradual U-shaped recovery.
What’s

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Commodity Tracker: 5 charts to watch this week

August 10, 2020

The diverging performance of commodities amid the coronavirus crisis, Indian oil demand and iron ore’s continued climb are explored in this week’s selection of energy and raw material trends to watch. Plus, Henry Hub rallies, and UK coal generation retreats.

1. COVID-19’s uneven impact on commodities
 
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What’s happening? The S&P GCSI commodity index is down 34% since the start of the year, but commodities have experienced widely different impacts from the pandemic and their recovery paths are still on multi-track trajectories. Crude prices crashed to four-decade lows while gold has jumped to all-time highs. Non-ferrous metals and power demand were initially hit hard due to lockdowns, but have staged a robust recovery. In the cereals and meat markets, most prices have

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Commodity Tracker: 5 charts to watch this week

August 3, 2020

Shifting oil demand forecasts are in the spotlight this week as the coronavirus pandemic continues to curb economic activity in major economies. Plus, China’s crude overhang, and trends in power, gas and LNG.

1. Mobility data dampens oil demand outlook
 

What’s happening? Mobility indicators, a key proxy for oil demand, are flatlining or falling in some of the world’s biggest oil-consuming countries amid growing fears over a resurgence in COVID-19 cases. In the US, the nation worst hit by the pandemic, Google data shows evidence of a July slowdown in economic mobility, which dipped to 25% below pre-crisis levels in the week to July 26.
What’s next? Rising coronavirus infection rates have already prompted some oil market analysts to cut their demand forecasts, most of which had previously

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Commodity Tracker: 5 charts to watch this week

July 27, 2020

The relentless rise of gold prices is in focus this week in S&P Global Platts editors’ roundup of energy and raw materials trends. Plus, freight rates react to Brent’s slight recovery, coal generation in Germany fizzles out, and more.

1. Gold keeps smashing records on COVID fears, global debt
 

What’s happening? Gold pushed higher July 27 early in the European trading day, and took down the previous all-time high of $1,921/oz. Safe-haven buying has continued to spur the metal higher, boosted by a weaker US dollar, continued uncertainty regarding the US’s response to COVID-19, the probability of another multi-trillion US economic stimulus package, and the colossal global debt stimulated by central banks and governments worldwide.
What’s next? With the above factors likely now to be priced

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Commodity Tracker: 5 charts to watch this week

July 20, 2020

A look at the sharp drop in EU carbon prices, and major drivers in the market, kicks off our selection of energy and commodity market trends this week. Plus, the OPEC+ rollback of production cuts, US LNG exports, and a new record for Texas peakload power demand.

1. EU carbon price rally comes to abrupt halt
 

What’s happening? EU carbon allowance prices fell hard July 16 after a steep rally to 14-year highs ran out of steam at over Eur30.00/mt ($33.76/mt). EU Allowance futures contracts for December 2020 delivery on the ICE Futures Europe exchange fell as low as Eur26.37/mt in late trades, down more than Eur2.00/mt on day. July 16 marked the first day of larger EU carbon auction volumes, which now include 50 million allowances from the EU’s Innovation Fund, to be spread evenly through

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Commodity Tracker: 5 charts to watch this week

July 13, 2020

Revisions of future oil and gas price assumptions by oil majors are in focus this week, along with the outlook for European power demand and sales on Gazprom’s ESP platform. In Asia, we take a look at South Korean refiners’ crude preferences and the prospects for commodity demand in China.

1. Oil majors rethink future price decks over pandemic squeeze
 

What’s happening? Europe’s biggest oil companies have been cutting their future oil and gas price assumptions over the expected long-term impact of the coronavirus pandemic on the global economy. BP got the ball rolling last month by announcing it would write off up to $17.5 billion worth of assets after cutting its long-term price assumptions for oil and gas to reflect expectations that the coronavirus pandemic will accelerate the shift

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Commodity Tracker: 4 charts to watch this week

June 29, 2020

As oil markets begin to recover from the shocks of recent months, side-effects like falling VLCC rates and congestion at Chinese ports are emerging, write S&P Global Platts news editors. Plus, competition heats up among corn exporters amid low ethanol demand, and UK power prices reflect improving demand.
1. Freight rates dive as call on VLCCs for floating oil storage lessens
 

What’s happening? The amount of crude stored on tankers is showing signs of a descent in response to the waning economics for storage, as production cuts and a measured demand recovery aids a rebalancing of the global oil market. The slowdown in storage is already starting to have a significant impact on freight. Rates on VLCCs have plunged dramatically in the past month as a gradual fall in floating barrels prompts

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Commodity Tracker: 4 charts to watch this week

June 22, 2020

The outlook for global oil demand and key trends in gas and LNG markets are in the sights of S&P Global Platts news editors this week, amid a stuttering recovery from the coronavirus pandemic continues.

1. Oil demand recovery in spotlight as IEA suggests tighter market in 2021
 

What’s happening? The global oil market is set to tighten next year with demand recovering from the coronavirus pandemic at a faster pace than supply, according to the International Energy Agency, giving OPEC and its producer allies scope to unwind their agreed-upon output cuts faster than expected. Global oil demand will grow 4 million b/d more than supply next year, which would mean shifting some of the huge oil stock overhang that has built up during the pandemic, the IEA said in its latest monthly oil market

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Commodity Tracker: 4 charts to watch this week

June 15, 2020

Global recovery from the coronavirus pandemic is proving patchy, and demands a close look at oil demand signals – the first stop in this week’s roundup of energy and raw material trends. S&P Global Platts editors also look at prospects for US crude exports to Asia, Ukraine’s importance to the European gas market this summer, and the impact of reduced French nuclear availability on power markets.

1. Global oil demand set for uneven recovery as coronavirus battle continues
 

What’s happening? Global oil demand is recovering from a record, 20 million b/d slump in April but not all fuels have suffered equally from sweeping lockdowns to combat the spread of coronavirus. Road and air transport fuels are on the frontline of the demand impact, suffering massive year-on-year contractions due to

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Commodity Tracker: 4 charts to watch this week

June 8, 2020

A recovery in Chinese independent refiners’ oil imports tops this week’s pick of trends in energy and raw materials markets. EU carbon markets, the relationship between US rig counts and tubular steel prices, and LNG supply to Europe are also on the agenda.

1. Saudi crude supply to Chinese independent refiners soars in May
 

What’s happening? China’s independent refiners ratcheted up crude imports in May by 71.1% on the year to a record high 4.42 million b/d, sending a bullish signal to the global oil market that the recovery in Chinese energy demand is on track. The independent refining sector’s crude imports from Saudi Arabia, Iraq, Oman and UAE increased 62.5% on the month to 7.78 million mt in May, accounting for about 41.6% of the total arrivals for those independent refineries, a

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Commodity Tracker: 5 charts to watch this week

June 1, 2020

US-China tensions have bubbled up again, and commodity markets could be caught up in the turmoil, not least LNG. Aviation activity and jet fuel are also in the mix this week, along with corn fundementals in North and South America, and UK solar power.

1. US LNG exporters face new test as China tensions resurface
 

What’s happening? The US move to no longer recognize Hong Kong’s independence from mainland China could lead to new tariffs and a potential collapse of the Phase 1 trade deal that promised $50 billion in US energy purchases through 2021. That would be significant for US LNG exporters, after deliveries to China resumed April 20 following a 13-month halt due to the impact of tariffs.
What’s next? Despite major coronavirus-related lockdowns earlier in the year, Chinese LNG demand

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Commodity Tracker: 5 charts to watch this week

May 18, 2020

The US oil production slowdown, China’s domestic gasoline pricing policy, and power market outlooks on both sides of the Atlantic feature in this week’s pick of commodity market trends from S&P Global Platts editors.

1. US rig count declines slow as WTI rebounds…
 

What’s happening? Since oil prices plunged in mid-March, upstream producers have cut their capital budgets and sharply curtailed drilling activity, resulting in a collapse in rig counts. But oil rig count declines have slowed in recent weeks as WTI futures have climbed back into the mid $20/b range.
Go deeper: Rig count in detail and map of key US basins
What’s next? Total US crude output averaged at 11.6 million b/d in the week ending March 9, down 1.5 million b/d from its mid-March peak and the weakest since December 2018.

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Commodity Tracker: 6 charts to watch this week

May 4, 2020

Oil producers in North America have announced vast cuts in output, led by ConocoPhillips, ExxonMobil and Chevron. Plus, contrasting gas market signals from both sides of the Atlantic, Brazilian corn exports under pressure and more, in S&P Global Platts editors’ pick of key trends in energy and commodities this week.

1. North American crude output set to decline in reaction to low oil prices…
 

 
What’s happening? Global oil companies have announced production cuts of roughly 4 million b/d in response to a collapse in prices. Of that total, around 1.8 million b/d has been announced by producers focused in the US and Canada, with ConocoPhillips, ExxonMobil and Chevron leading the way. Production cuts could even be higher, as only some of the dozens of companies announcing spending cuts

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Commodity Tracker: 5 charts to watch this week

April 27, 2020

A look at crude oil quality across countries that have committed to cutting production, tumbling global gas prices, and trends in steelmaking raw materials all feature in this week’s pick of visuals.

1. As OPEC+ agreement kicks in, heavier crude could see bulk of cuts
 
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What’s happening? The OPEC+ production cuts go into effect May 1, and the beleaguered oil market will be watching to see if the 23-country alliance led by Saudi Arabia and Russia fulfills its commitment to rein in 9.7 million b/d of crude output.
What’s next? The market will also be counting on economically forced shut-ins by other key producers, such as the US and Canada, to bring global supply down in line with coronavirus-hit demand. Crudes towards the heavier end of the quality spectrum are likely to

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Commodity Tracker: 6 charts to watch this week

April 20, 2020

A revived agreement from OPEC+ on oil production cuts, China’s gradual restart after lockdown, and power markets in the doldrums are illustrated in charts picked by S&P Global Platts editors, in this week’s selection of trends from energy and raw materials markets.

Oil price wars
1. OPEC+ pulls a deal out of the bag, but will cuts be deep enough?
 
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What’s happening: The 23 oil producing countries that make up OPEC+ have secured historic global support for cuts to remove around 15 million b/d from the market over the next few months. Saudi Arabia and Russia are set to lead by example by taking on a bigger share of the cuts, which come into effect from May 1 and include output reductions from countries outside the pact, including the US and Canada. The North American

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Commodity Tracker: 6 charts to watch this week

April 6, 2020

In this week’s pick of energy and commodity charts to watch, super tankers are in high demand to store oil while prices remain at historic lows. Plus, regional gas prices converge around all-time lows, European steel and aluminum demand plummets, and Asian gasoline markets expect little relief from oversupply.

1. Global crude oil glut creates demand for long-term floating storage
 

 
What’s happening? Some super tankers are being booked to store crude for up to three years—potentially the longest ever duration for floating storage—as traders seek to profit from hoarding oil to cope with the current oil demand and supply shocks. The race to secure floating storage has picked up significantly in recent weeks, with up to 40 VLCCs and 20 Suezmaxes already placed on long-term chartering,

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Commodity Tracker: 5 charts to watch this week

March 30, 2020

Demand destruction from the coronavirus outbreak will be top of mind for power and gas traders this week, while the ripples in the oil market are being felt in Saudi Arabia and Vietnam, albeit in different ways. The iron ore market, which is faring better, rounds out this week’s pick of commodity charts by S&P Global Platts news editors

1. Lockdowns in Europe, Asia push TTF gas price to 16-year low…
 

 
What’s happening? The coronavirus lockdowns in Europe and now India are hitting gas prices hard, with the TTF month-ahead falling to its lowest level since S&P Global Platts began assessments in 2004 of just Eur7.15/MWh. Reduced industrial activity in Europe has led to lower gas demand while declarations of force majeure by Indian LNG buyers mean deferred cargoes are likely to land on

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Commodity Tracker: 5 charts to watch this week

March 23, 2020

US oil exports are under pressure as WTI’s differential to Middle Eastern offers narrows, reducing its appeal in Asia. Meanwhile, the gut-punch to global demand from the coronavirus pandemic is playing out across markets, putting EU carbon prices high on traders’ watchlist after last week’s nosedive.

1. WTI loses competitive edge in OPEC+ price war
 

 
What’s happening? US crude suppliers could fall victim to the price war triggered by Saudi Aramco’s latest move to slash official selling prices in Asia, as WTI’s discount to Middle East crude benchmark Dubai is being eroded. The spread between the front-month WTI swap and same-month Dubai crude swap has averaged minus $2.34/b to date in March, on course to register the narrowest monthly discount since minus $1.99/b in April 2018,

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Commodity Tracker: 7 charts to watch this week

March 16, 2020

The coronavirus pandemic continues to play havoc with commodity markets, but while many products have been pummeled by the weak demand outlook and the eruption of an oil price war, others are proving more resilient. S&P Global Platts news and pricing editors sort the bullish from the bearish in raw materials and energy markets.

1. VLCC rates spike on Saudi crude deluge, floating storage demand
 

What’s happening? Asian VLCCs were hit hard by the coronavirus outbreak, with the benchmark Persian Gulf-China rate down by over 50% since the start of this year. This was due to a drop in crude purchases from China. But almost overnight, oil prices headed south towards the $30/b mark and Saudi Arabia decided to flood the market with crude. Saudi Arabia’s shipping company Bahri chartered more

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Commodity Tracker: 4 charts to watch this week

March 9, 2020

As oil markets and the wider commodities complex digest the breakdown of the OPEC+ alliance, they are also assessing the demand-side damage wreaked by coronavirus. In the European power sector, it’s the weather that is holding markets in thrall: wind generation continues to smash records as March proves almost as stormy as February.

1. No reprieve for oil markets as OPEC talks flounder
 

What’s happening? Oil majors will be hoping the carnage on the oil markets doesn’t last too long after the alliance between OPEC and Russia fell apart. The tone is set for increased supply from all oil producers and in particular Saudi Arabia amid coronavirus-led demand weakness. While analysts believe Big Oil will keep investment plans intact in the coming months, this really depends on whether oil

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Commodity Tracker: 4 charts to watch this week

March 2, 2020

From crude oil to gas to gold, commodities markets continue to be affected by the outbreak of coronavirus and the impact it has had on global economic sentiment. Read on for our pick of unfolding market trends from S&P Global Platts news editors.

1. Oil traders brace for weak demand
 

What’s happening? A state of contango – where prices for forward delivery are higher than those for nearer delivery dates – has spread through the Dubai crude oil market, implying traders are bracing for unusually weak demand in the second quarter and beyond. Oman crude also fell into contango at the end of last week, ending the month at parity with Dubai.
What’s next? Market conditions will increase pressure on OPEC and its non-OPEC allies to agree to extend and deepen production cuts at their meeting in

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