Abans Group Commodity World Round Up

08th Feb – 12th Feb

1. Global demand for silver is expected to rise to 1.025 billion ounces in 2021

Feb 10, 2021

Global demand for silver is expected to rise to 1.025 billion ounces in 2021, according to a report published by the Silver institute, which predicts that the purchases of bars and coins would rise to a six-year high of 257 million ounces in 2021. Silver industrial demand will rise 9%, from 2020 levels, to a four-year high of 510 million ounces, and demand for silver for jewellery will rise to 174 million ounces, however it will remain below levels seen before the pandemic. Silver mine production is expected to rise to 866 million ounces in 2021.

Source: Reuters

2.Steel demand in the EU plus the UK seen rebounding by 13.3% in 2021

Feb 10, 2021

The European Union (EU) and the UK’s apparent consumption is forecasted to fall 13% in 2020, before bouncing back this year by 13.3%, to 152 million tonnes, but this would still be 2 million tonnes below the 2019 level. Demand for steel in the European Union and Britain fell by 11.6% year-on-year in the third quarter of 2020, as the COVID-19 pandemic hit industrial activity. The third quarter decline in apparent steel consumption for the 27 EU members plus Britain to 32.8 million tonnes was an improvement against drop of 25% in the second quarter.

Source: Reuters

3.The EIA raises oil price forecasts

Feb 09, 2021

The U.S. Energy Information Administration (EIA) has raised its Brent and West Texas Intermediate (WTI) oil price forecasts for 2021 and 2022, its February short-term energy outlook (STEO) report has revealed. According to the latest report, the EIA now sees Brent spot prices averaging $53.20 per barrel this year, and $55.19 per barrel next year, and WTI spot prices averaging $50.21 per barrel this year, and $51.56 per barrel next year. The EIA’s previous STEO, which was released in January, saw Brent spot prices averaging $52.70 per barrel in 2021, and $53.44 per barrel in 2022. It projected that WTI spot prices would average $49.70 per barrel in 2021, and $49.81 per barrel in 2022.

Source: Reuters

4.Average natural gas spot prices at Henry Hub are expected to rise to $2.98/MMBtu

Feb 09, 2021

Average natural gas spot prices at Henry Hub are expected to rise to $2.98/MMBtu this month, which is a 27-cent increase over January prices, and sharply higher than the $2.59 December average, the U.S. Energy Information Administration (EIA) has said on Tuesday. Higher expected prices in February reflect expectations of continued strong liquefied natural gas (LNG) exports, and a shrinking surplus of natural gas in storage, compared with the five-year (2016–20) average. More recent forecasts for mid-February weather show cold temperatures could extend across much of the United States, which creates an upside risk to near-term prices in this outlook. 

Source: Reuters

5.The Bank of Japan has room to cut its interest rate further

Feb 10, 2021

Bank of Japan officials are considering ways to communicate that the bank has room to cut its interest rate further below zero, according to people familiar with the matter. With a month still to go before the central bank’s policy review, no conclusions have been reached, but officials see a need to make it clearer that reducing rates is a live option, while considering ways to minimize the side effects of such a move, the people said. The bank doesn’t plan to cut from the current level of -0.1% for now, but it should ensure that it can, in case the policy becomes necessary in a crisis, the people said.

Source: Bloomberg

6. OPEC+ won’t raise output for another month: Iraqi Oil Minister Ihsan Abdul-Jabbar

Feb 10, 2021

According to Iraqi oil minister, Ihsan Abdul-Jabbar, OPEC+ will meet on March 4, but the Group will likely agree to keep the same level of oil production through April 2021. As per his statement, Saudi Arabia will continue making its extra voluntary cuts of a million barrels per day. He also reiterated its commitment to the production cuts, although it has yet to meet its promised quota, and Iraq will keep its oil production at 3.6 million barrels per day in February.

Source: Oil price.com

7. OPEC revises up the 2021 oil demand forecast with more growth seen in H2

Feb 11, 2021

OPEC raised its estimate of 2021 global oil demand from the last month, saying that growth, especially for industrial fuels in the second half, will be led by positive economic developments, supported by "massive stimulus programs." Demand will average 96.1 million b/d this year, up from 95.91 million b/d forecast last month, the OPEC said on February 11, in its closely watched monthly market report. The estimated increase of 5.8 million b/d over 2020 was revised down by about 100,000 b/d, as H1 projections were lowered, due to the extended and partially re-introduced lockdowns, because of the pandemic. Demand fell 9.7 million b/d in 2020.

Source: Reuters

8. US labour market scenario remains tepid: Jerome Powell

Feb 10, 2021

Federal Reserve Chairman, Jerome Powell, has on Wednesday stated that the overall scenario in the US labour market remains tepid, and noted that continued aggressive policy support is needed to sustain the recovery. He said that despite the surprising speed of recovery early on, we are still very far from a strong labour market whose benefits are broadly shared. Employment in January of this year was nearly 10 million below its February 2020 level, a greater shortfall than the worst of the Great Recessions aftermath, he opined. The longer-run potential growth rate of the economy appears to be lower than it once was, in part, because of the population ageing, and that the neutral rate of interest, or the rate consistent with the economy being at full employment with 2% inflation, is also much lower than before.

Source: Reuters