Highlights U.S. growth remains robust, despite some temporary softness in recent months. Ex U.S., growth continues to fall but, with China probably now ramping up monetary stimulus, should bottom in the second half. Central banks…
Fears over a global slowdown in energy demand have been replaced by a focus on reduced crude inventories that point to a tight market (bottom panel), aided in large part by OPEC supply cuts and reduced Iranian and Venezuelan…
Overweight Energy prices in 2019 have been bouncing off the recent lows touched at the end of 2018 when global markets melted down. It appears that fears over a global slowdown in energy demand have been replaced by a focus…
In 2010, only about 6% of global crude output came from the U.S. Fast forward to today and the U.S. produces almost 15% of global crude, having grabbed market share from both OPEC and non-OPEC countries. At the same time, the…
Highlights The correlation between oil and petrocurrencies has deeply weakened in recent years. One of the reasons has been the prominence of new, important producers, notably the U.S. Oil prices should trend towards $75/bbl by year-…
Our Commodity & Energy Strategy team’s 2019 and 2020 Brent price forecasts remain at $75 and $80/bbl. Delays in building out U.S. Gulf deepwater-harbor capacity next year will keep exports constrained. This will back…
Highlights Venezuela’s oil production likely fell ~ 500k b/d last week in the wake of nationwide power outages, reducing total output to ~ 500k b/d. However, neither OPEC 2.0 nor U.S. President Donald Trump drew much attention to…
Relative share prices are no longer rising by 50% / annum. Instead, momentum has collapsed and is now contracting. Sell-side analyst exuberance has turned into outright pessimism: refiners’ profits are expected to trail the…
Overweight Last summer we took refiners down to a below benchmark allocation as all of the good news was perfectly reflected in soaring relative share prices (top panel), at a time when cracks were forming. Today, refiners…
Highlights Portfolio Strategy As growth becomes scarce, investors flock to sectors that are slated to outgrow the broad market and shy away from the ones that are forecast to trail the SPX’s growth rate. This week we rank…