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Commodity Tracker: 6 charts to watch this week

7 days ago

Global gas price convergence tops this week’s pick of energy and commodities charts to watch. Plus: US LNG exports, coronavirus impact on Asian crude oil and bunker fuel trade, emerging European power market dynamics, and global steel price trends.

1. Globalized gas prices race towards rock bottom…
 

 
What’s happening? Global gas spot prices have converged again in recent weeks to the downside as the coronavirus outbreak and its impact on Chinese LNG demand adds to already very bearish sentiment across the world. Spot prices in Asia, Europe and the US have converged in an extremely narrow $1.10/MMBtu range as the global gas glut looks set to worsen amid weak demand, high storage stocks and mild winter temperatures. The JKM Asian spot price has fallen to an all-time low of just

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Commodity Tracker: Coronavirus and commodity markets

14 days ago

The spread of coronavirus outside China and the WHO’s escalation of the outbreak to emergency status last week continue to stoke fears over weaker energy demand and disruption to key mineral resource supply chains.  In this special edition of Commodity Tracker, S&P Global Platts editors take a look at the impact across a number of energy products and raw materials.

1. Key benchmarks fall
Click to enlarge
Dated Brent lost approximately 5% of its value during the course of last week (January 24-31), while copper – seen as a barometer of economic health – saw an even larger slide. However, by the end of the week market participants were seeing the metal as oversold, with some looking to take long positions in anticipation of China returning to the market.
 
2. No blue skies for jet
 

Key

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Commodity Tracker: 6 charts to watch this week

21 days ago

Traders of oil products and iron ore have their eyes trained on China’s supply-side dynamics, as the country grapples with the coronavirus outbreak. Also in the spotlight this week: Permian gas output, Germany’s coal plant closures, US corn exports and European gas prices.

1. China oil product demand pressured by Wuhan travel curbs…
 

 
What’s happening? China’s oil product consumption growth could face a setback in the first quarter, with the outbreak of the Wuhan coronavirus limiting both road and air traffic flows during the Lunar New Year festive period, one of the country’s busiest travel seasons. Wuhan City Council has suspended all public transport including city buses, subway, ferry and coach. It also shut the city’s airport and railway stations, effective Thursday.
What’s next?

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Commodity Tracker: 7 charts to watch this week

28 days ago

This week’s pick of energy and commodity market trends kicks off with EU biofuels demand prospects and a window of opportunity for Australian crude oil grades. US and European gas market dynamics and Brazilian corn prices are also in the sights of S&P Global Platts news editors this week.

1. Renewables goals boost global biofuels demand
 

 
What’s happening? In 2020, each EU member country will need to meet specific national renewable energy targets set by the European Commission. One route is to blend more biofuels into road fuels, with more countries adopting E10 gasoline, which contains up to 10% ethanol, twice as much as the current E5 standard. In 2019, the Netherlands became the latest European country to introduce E10 gasoline, following Finland, Belgium, France and Germany.

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Commodity Tracker: 5 charts to watch this week

January 13, 2020

In this week’s pick of energy and commodities trends, European wind generation storms into 2020 and oil refiners in Asia and Europe feel the impact of US-Iran tensions. Plus, S&P GSCI index performance in 2019 reveals investors’ darlings among commodities. 

1. European wind charge sweeps away nuclear concerns
 

 
What’s happening? Wind generation records tumbled across Europe last year and 2020 got off to a flying start in week 1 with fresh output highs across Nordic markets. There are now over 200 gigawatts of wind capacity installed across Europe, up from 189 GW a year ago. Stormy weather, further spikes in green generation and continuing low gas prices are expected in the short term. These factors drove week 3 German power down 30% in value year on year versus January 2019’s average

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Commodity Tracker: Middle East special edition

January 6, 2020

Geopolitical risk has heightened in the wake of the US killing of Iran’s General Qassim Soleimani, with shockwaves being felt across commodities. S&P Global Platts news editors present the latest in this special edition of the Commodity Tracker

1. Business as usual in the Strait of Hormuz

S&P Global Platts Analytics cFlow showed vessels continuing to move through the Strait of Hormuz normally during the morning in Europe. But the fallout from Soleimani’s killing continues, with Iran promising retaliation and US President Donald Trump warning of sanctions against Iraq in response to the country’s parliament voting to expel foreign troops.
2. Tensions elevate Brent crude oil prices

Front-month ICE Brent crude oil futures traded at $69.22/b on Monday lunchtime in Europe, having earlier

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Commodities and energy in 2019, in infographics

December 30, 2019

In a volatile year for commodities and energy, S&P Global Platts’ news, pricing and analytics teams explored many of the biggest themes and trends through infographics. Here are a selection.

Tariff disputes weigh on commodities trade
After around two years of trade tensions between the US and China, S&P Global Platts analyzed the impact on global product flows.
Click for full-size infographic
 
How to replace Iranian oil?
After US sanctions on Iran tightened with the non-renewal of waivers for oil importers, there were still plenty of options on the table to replace specific Iranian crude grades.
Click for full-size infographic

The biggest carbon emitters
Ahead of COP 25 in Madrid, S&P Global Platts crunched the numbers to show carbon emissions of the biggest global economies, and their

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Commodity Tracker: 4 charts to watch this week

December 16, 2019

OPEC and allies may have reached a deal on crude oil production cuts, but the hard work to achieve a balanced market starts now. S&P Global Platts editors look at the challenge OPEC faces in early 2020, as well as key trends in global LNG, marine fuels and lithium. 

1. Can OPEC deliver a balanced oil market in 2020?
 

 
What’s happening? OPEC has its work cut out to rebalance the market in the first half of 2020, despite the International Energy Agency lowering its forecast for non-OPEC oil supply growth on reduced expectations for US, Brazil and Ghana along with planned aggressive output cuts from OPEC’s allies.
What’s next? OPEC and its allies will be implementing their 1.7 million b/d production cut deal in January with potentially another 400,000 b/d in voluntary cuts from Saudi

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Commodity Tracker: 5 charts to watch this week

December 9, 2019

Oil markets are digesting the latest OPEC announcement on production cuts this week, while regional LNG prices converge and nickel continues on a bearish streak, in S&P Global Platts editors’ pick of energy and commodity trends.

1. OPEC, allies agree to new oil output cuts at eleventh hour
 

 
What’s happening? OPEC, Russia and nine other allies delivered a new production cut deal November 6, just hours after it appeared their pact was close to unravelling. OPEC+ will deepen collective output cuts by 503,000 b/d to 1.7 million b/d from January through March, with Saudi Arabia voluntarily slashing another 400,000 b/d of production beyond its new quota. “We already believed market fundamentals warrant $66/b Brent in January, even assuming the existing agreement simply rolled over through

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Commodity Tracker: 6 charts to watch this week

December 2, 2019

As COP25 kicks off in Madrid, S&P Global Platts editors take a look at the CO2 impact from OPEC oil production. European gas and nuclear, and IMO 2020’s impact on commodities as diverse as fuel oil and iron ore, are also on the agenda in this week’s pick of charts.

1. OPEC oil-only CO2 output dwarfs EU total emissions
 
Click to enlarge
 
What’s happening? OPEC is meeting this week to decide on output quotas, but climate change isn’t on the agenda for the group of 15 major oil producers. OPEC’s total crude output for 2018 would have been responsible for carbon dioxide pollution equal to 5 billion mt, calculated based on average emissions figures for oil from the US Environmental Protection Agency (EPA). That exceeds Europe’s total emissions of the greenhouse gas, from all sources, last

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Commodity Tracker: 5 charts to watch this week

November 25, 2019

In this week’s pick of energy and commodity charts, Asian jet fuel suppliers feel the pinch from Hong Kong’s weak demand as protests in the city persist. Plus: Fujairah stocks and IMO 2020, global gas exporters meet in Equatorial Guinea, and more.
1. Hong Kong unrest causes jet fuel demand to nosedive
 

 
What’s happening? Prolonged political protest in Hong Kong appears likely to continue taking a heavy toll on the city’s oil consumption. Aviation fuel demand in particular has trended sharply lower in recent months, on faltering air passenger and cargo traffic volumes. Hong Kong has been gripped by social unrest since June, with protests prompting a major airport shutdown on August 12. Aircraft activity, freight and passenger figures all sharply fell in October as the demonstrations

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Commodity Tracker: 6 charts to watch this week

November 18, 2019

Nuclear generation in the US and France faces contrasting challenges of power market prices and safety concerns, as this week’s graphics show. Other top trends picked by S&P Global Platts editors include China’s falling LNG imports, stuttering gold prices, refinery margins and coking coal prices.

1. US nuclear sector struggles amid weak power prices…
 

 
What’s happening? Across the US Northeast, largely in states with deregulated power markets, nuclear power plants are being slated for retirement. Their owners are contending with low to flat power demand and depressed wholesale power prices, partly as a result of robust shale gas supply that has lowered gas prices. In deregulated markets, power generators compete to sell electricity in wholesale markets, as opposed to earning a

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Commodity Tracker: 5 charts to watch this week

November 11, 2019

Precious metals top this week’s selection of energy and commodity charts, as palladium prices continue to climb, but provide little upside for platinum. Plus: US natural gas prices, Middle East economies’ oil dependency, European coal-to-gas generation switching and Chinese LNG imports.

1. Palladium continues to roar: eyes on $2,000/oz
 

What’s happening? Palladium, the darling of the precious metals world for the past 18 months, continues to power forward, leaving sister metal platinum in its wake. Both are used in auto catalyst technology to lower emissions. Platinum has suffered from the downturn in diesel vehicle sales, and the stigma following the “diesel-gate” scandal that surfaced in 2015. Conversely palladium, used in petrol engines, has seen demand accelerate on tightening

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Commodity Tracker: 7 charts to watch this week

November 4, 2019

LNG breaks new records either side of the Atlantic in this week’s pick of energy and commodities trends from S&P Global Platts editors. Plus: US crude imports and refining, German power price dynamics and more.

1. US LNG feedgas demand hits new single-day high…
 

What’s happening? US LNG feedgas demand is trending near record-high levels again this month as production at both Freeport LNG and Elba Island continue to ramp up. In October, demand from the six US LNG export facilities currently in operation has averaged over 6.6 Bcf/d. On October 26, demand reached a single-day record high at over 7.5 Bcf/d, data from S&P Global Platts Analytics shows.
What’s next? Growing export supply from the US and other emerging producers like Australia has put global gas prices under pressure this

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Commodity Tracker: 4 charts to watch this week

October 28, 2019

As LME week kicks off, S&P Global Platts editors take a closer look at the current drivers of copper prices. US oil and refined products trade, UK political parties’ energy policies, and a glut of Russian coal on the European market round out this week’s selection.

1. Upturn in copper prices a key talking point for LME Week
 

What’s happening? 2019 has proved a turbulent year for metals, with the continued trade dispute between the US and China – and the associated economic malaise – one of the biggest drivers. For copper it has been a kick in the teeth, as the metal dropped from around $6,600/mt in April to a low of $5,520/mt in September, although it is currently trading somewhat higher at around $5,895/mt. As LME Week begins, there is renewed optimism for copper prices headed into

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Commodity Tracker: 6 charts to watch this week

October 21, 2019

China’s latest economic data continues to paint a subdued picture for commodity and energy demand, while lower drilling counts in the US raise questions about the pace of future supply growth. S&P Global Platts editors shed light on these and other trends, including a Nordic wind power boom, US-Turkey steel trade, and more.  

1. China and commodities: a tale of two inflations
 

What’s happening? China’s consumer price index (CPI), released last week, hit a nearly 6 year high, as pork prices drove it higher following a more than 40% decline in China’s pig herd due to African Swine fever. This has caused much consternation among consumers, with the average price of pork nearly doubling since the beginning of the year. It’s also a major concern for the Chinese government, which wants to

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Commodity Tracker: 5 charts to watch this week

October 14, 2019

Natural gas is top of our editors’ picks of unfolding commodity trends this week, with Europe’s market responding to oversupply and solid US production giving rise to ample storage. Elsewhere, low US power prices, Germany’s latest plan to step up emissions reductions and soaring nickel prices all feature.

1. Weather forecasts cause wild ride in European gas…
 

 
What’s happening? The European gas market is oversupplied, thanks to a global LNG surplus and storage stocks close to capacity. Traders are looking for signs that the bearish mood could lift, with revisions to weather forecasts driving wild swings in prices at the Dutch TTF hub since the start of September.
What’s next? The TTF day-ahead price dropped to as low as €8/MWh last week. This provided little incentive to withdraw gas

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Commodity Tracker: 6 charts to watch this week

October 7, 2019

A new production record for Permian basin gas, and rising transport costs for crude oil into Asia, are top of S&P Global Platts editors’ picks this week. Plus: EU renewables output, Egypt’s return to abundant natural gas supply, a US power price spike, and the squeeze on European steel mill margins.

1. Gas pipeline start-up helps Permian output to new highs
 

What’s happening? Gas production in the Permian Basin of West Texas edged up to a record high in late September, rising to nearly 9.5 Bcf/d, following the startup of Kinder Morgan’s Gulf Coast Express Pipeline. The 2 Bcf/d intrastate pipeline, which is designed to move associated gas production from the US’ most prolific shale play to the Texas Gulf Coast, entered commercial service about one week ahead of schedule on September 25.

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Commodity Tracker: 4 charts to watch this week

September 30, 2019

Asian demand for light crude oil grades and record US gas exports to Mexico are in the sights of S&P Global Platts editors this week. Plus, European gas price trends and the prospects for German power plant fuel switching.

1. Asian crude buying helps widen spread between light and heavy grades
 

What’s happening? Asia was quick to respond to the growing uncertainty over Arab Light and Arab Extra Light crude supplies following the September 14 attacks on core Saudi oil facilities, with Southeast Asian refiners among the first group of buyers to secure alternative light oil cargoes from the spot market. The apparent shortage in supply of light Saudi crude to Asian refiners has boosted demand for distillate-rich grades in the global spot market. As a result, the outright price spread

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Commodity Tracker: 6 charts to watch this week

September 23, 2019

Oil markets are scrutinizing the export and stock balance of OPEC kingpin Saudi Arabia this week, following attacks on critical oil infrastructure. Brazil’s corn exports and the success of Gazprom’s European auction platform are also among our latest pick of energy and commodity market trends.

1. Saudi Arabia looks to plug oil export gap in wake of attacks
 

What’s happening?  The devastating aerial attacks on Saudi Arabia’s key oil infrastructure last week brought into acute focus the falling crude supply buffer held by the world’s biggest oil exporter to shield against market trauma from upsets to its oil industry. Since OPEC cuts were launched in 2017, Saudi Arabia has been drawing on its crude stocks to help maintain export flows at a time of growing crude domestic demand for its

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Commodity Tracker: 6 charts to watch this week

September 16, 2019

Geopolitical risk and oil markets top this week’s pick of energy and commodities themes from S&P Global Platts editors. Plus, Ukraine’s role in European gas supply, steel scrap prices as a bellwether for economies, and a milestone approaches for US LNG exports.

1. Global oil markets on alert after attacks on Saudi oil facilities
 
Click for full-size infographic
What’s happening? Attacks on Saudi Arabian oil facilities at Abaiq and the kingdom’s second-largest oil field, Khurais, have led to the temporary loss of 5.7 million barrels a day of output, causing oil prices to jump and bringing back into focus the geopolitical risk in the Persian Gulf region. Saudi Arabia produced 9.77 million barrels a day in August, of which it exported around 7 million, according to the latest S&P Global

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Commodity Tracker: 6 charts to watch this week

September 9, 2019

Globalization of natural gas markets, OPEC’s struggle to balance oil supply and price, and platinum coming to the fore as an investment vehicle are all covered in this week’s selection of essential charts from S&P Global Platts editors.

1. Global gas price differentials keep tightening…
 

What’s happening? Gas spot prices across regions have converged in recent weeks due to the continued gas glut in an increasingly globalized gas market, with surplus LNG cargoes struggling to find homes amid subdued demand in Asia. With limited European storage demand, coal-to-gas switching in Europe maximized and the global LNG surplus growing all the time, prices are now within a small $2/MMBtu range.
What’s next? With more US LNG set to come online over the next 12 months, the global gas glut could

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Commodity Tracker: 6 charts to watch this week

September 2, 2019

US-China trade tensions and a febrile political climate in the UK are driving key commodity flows and price trends this week. S&P Global Platts editors’ latest pick of charts spans agriculture, the energy complex and metals.

1. US soybean stocks pile up as Chinese export avenue cut off
 

What’s happening? At the start of the new US marketing year, farmers are sitting on a huge pile of soybean stocks, estimated at 29.1 million mt, up 144% from 2017-18 levels. The escalated US-China trade tensions have nearly halted bean exports to China, which accounted for over 48% of US sales in 2017-18. Prices have simultaneously fallen for US soybeans, with average prices for 2018-19 seen at $8.5 per bushel, down 9% from a year ago. Alternative markets for US-origin beans look very small compared with

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Commodity Tracker: 4 charts to watch this week

August 26, 2019

An upcoming decision on Dutch gas output will be significant for European wholesale markets, while in bunker markets the impact of IMO 2020 is being felt in differentials between high and low sulfur marine fuels. S&P Global Platts editors delve into key energy trends for the week ahead.

1. EU gas markets await decision on Groningen production quota
 

What’s happening? The Dutch economy ministry is expected to shed light on future production limits on the giant Groningen gas field onshore the Netherlands. In the coming weeks, the ministry should publish the results of work by Dutch gas grid operator Gasunie into the feasibility of lowering the production quota from the field for the next gas year. The quota was provisionally set at 15.9 Bcm, but is expected to be lowered to 12.8 Bcm, or

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Commodity Tracker: 5 charts to watch this week

August 12, 2019

Economic indicators spell potential trouble for oil demand, while US gas producers and exporters are feeling the pressure from oversupply on both the domestic and global markets, S&P Global Platts editors explain in our weekly selection of big commodities trends to watch.
1. US treasury yield curve a warning sign for oil demand
 

What’s happening? The difference between long-term and short-term interest rates, or the slope of the yield curve, has borne a consistent negative relationship with subsequent real economic activity in the US, with a lead time of about four to six quarters. The last time the yield curve was this low was just before the financial crisis in 2007 when concerns still existed over peak oil supply. Fast forward to 2019 and the pattern between yields and oil prices is

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Commodity tracker: 5 charts to watch this week

July 22, 2019

S&P Global Platts editors’ pick of unfolding commodities trends. This week, tight US gasoline supply incentivizes imports, high-tech industries drive tin demand and Iranian oil exports hit new low. Plus impacts of Europe’s heatwave and China key economic data on energy and commodities.

1. US gasoline output curbs driving NYMEX RBOB backwardation
 

What’s happening? RBOB gasoline structure has firmed in recent weeks amid refinery issues on the US Atlantic Coast that are limiting local gasoline production and adding stress to regional supply during the high-demand summer driving season. Philadelphia Energy Solutions announced it would shutter its 335,000 b/d refinery outside of Philadelphia after back-to-back fires in June resulted in the destruction of the facility’s alkylation unit. In

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Commodity tracker: 6 charts to watch this week

July 15, 2019

S&P Global Platts editors’ pick of unfolding commodities trends. This week, bunker values at Fujairah plunge, mine overcapacity puts pressure on key battery metal lithium, and US LNG exporters face tight margins over the summer. Plus Chinese refiners’ growing taste for Saudi crude, EU CO2 prices and gas and coal profitability.

1. Fujairah bunker values plunge as Middle East risk rises
 

What’s happening?  Marine fuel sales in the Port of Fujairah are estimated to have dropped about 16% in the second quarter versus the first quarter, on continued tensions in the Middle East. Recent alleged tanker attacks in the region have weighed on market sentiment, industry sources have told S&P Global Platts. Fujairah is among the world’s top bunkering hubs and lies outside the Strait of Hormuz, which

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Commodity tracker: 5 charts to watch this week

July 8, 2019

S&P Global Platts editors’ pick of unfolding commodities trends. This week, record iron ore prices are crushing Chinese steelmakers’ margins and Germany’s coal-fired generation is under intense pressure from gas and renewables, while in European wholesale gas markets, Gazprom is registering ever-higher sales through its auction platform. Finally, OPEC is targeting a thorough rebalancing of the oil market, and we take a look at the latest moves in coffee prices.

1. Record iron ore prices could force Chinese mills to trim output
 

What’s happening? Spot iron ore prices reached their highest level since early 2014, hitting $126.35/mt CFR China for 62% Fe iron ore fines on July 3, before easing slightly. This is largely due to the supply outage in Brazil following Vale’s accident in January,

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