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In this episode of Oil Insights, Martha Dowding hosts and is joined by fellow Research Associate, Mita Chaturvedi to analyse recent movements in oil prices, with a focus on Brent crude, (trading at $75/bbl at time of recording). Martha and Mita discuss three primary factors influencing prices at the moment: the potential for geopolitical flare-ups, investor positioning based on Commitment of Traders (COT) data, and expectations for a soft landing in the US economy. These factors are shaping market sentiment and driving volatility as the week progresses.
Martha and Mita discuss the ongoing geopolitical tensions, particularly the conflict between Israel and Hezbollah, which has intensified with missile strikes targeting key locations in Israel. While these incidents have not yet resulted in direct market disruptions, the potential for further escalation, including a possible Israeli strike on Iranian military assets, keeps geopolitical risks on the radar for oil traders. The market is experiencing some volatility, with heightened sensitivity to these developments.
Martha and Mita discuss the ongoing geopolitical tension - particularly the conflict between Israel and Hezbollah, which has intensified with missile strikes targeting key locations in Israel. While these incidents have not yet resulted in direct market disruptions, the potential for further escalation, including the extent of the future Israeli strike on Iran, keeps geopolitical risks on the radar for oil traders. The market is experiencing some volatility, with heightened sensitivity to these developments.
#Geopolitical #Risk #speculativeshift #Israel #Iran #Military #Oil #oott #oilmarkets
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On today's episode, James Brodie and James Todd dive into the latest macroeconomic developments shaping global markets. The U.S. housing market faces steep challenges as mortgage applications drop by 17%, and the 30-year mortgage rate hits 7.25% - the highest since July. Across the Atlantic, UK house prices show slower growth at 0.3% month-on-month.
They also cover key updates from the Federal Reserve, with Atlanta Fed President Raphael Bostic emphasising that rate cuts are not imminent despite a strong labour market and declining inflation.
In China, the government moves to double its loans for unfinished properties to $562 billion in efforts to stabilise the housing sector, while liquidity measures and interbank rates signal ongoing stress in the financial system. With China’s credit growth slowing, they explore what this means for global investors.
As the U.S. election draws closer, they examine Trump’s growing lead in prediction markets and discuss the impact on the financial landscape as well as Elon Musk's controversial support for Trump’s 2024 presidential campaign.
Finally, tune in for insights into the crypto market as Bitcoin trends higher but faces resistance at $71,800 and $73,800. -
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In this episode of Oil Insights, host Harry Tchilinguirian, Group Head of Research at Onyx Capital Group, is joined by Onyx Research Associates Vincent Wu and Martha Dowding to discuss how recent geopolitical developments have influenced the oil market. Following the October 1 missile attacks on Israel by Iran, the market is closely monitoring Israel's potential response, with Brent prices fluctuating between $73 and $80 per barrel.
The discussion also covers the latest positioning data, highlighting how money managers are taking cautious positions on Brent. A significant impact was felt when a Washington Post article reported that Israel may target military sites in Iran, not its oil or nuclear infrastructure, suggesting geopolitical uncertainty could keep oil prices volatile.
In addition, the team explore the macroeconomic headwinds from China’s economic situation and stimulus measures, shedding light on how they may affect oil prices and demand. Harry, Martha and Vincent revisit their previous prediction about Brent's trading range, noting that it remains consistent within the $70s but could shift depending on developments in the Middle East and China.
The team delve into product markets, focusing on Naphtha trends and regional differences in pricing, particularly between Asia and Europe, as they analyse the implications of gasoline demand and petrochemical sector activity.
Chapters for this episode are:
0:00 Welcome | This week in the oil markets
5:11 Brent Futures
12:47 "Crystal ball moment" - Where will Brent be trading by the end of the year?
20:46 Product of the week: Naphtha
28:00 What we’ll be watching this week | Concluding remarks -
Manny and Jonah analyse recent market trends and trading strategies in the oil sector. While the market has been relatively quiet but volatile, with crude oil prices settling in the high 70s per barrel, there is speculation around geopolitical risks - such as potential disruptions in the Strait of Hormuz and the impact of increased crude production in Libya. Manny points out that a sell-off in a specific part of the market curve, mainly due to excess supply and hesitant refiners, has led to a bearish outlook. She cautions about the potential bear traps, stressing that traders need to stay cautious when the market is unpredictable.
Financial traders are heavily short, anticipating continued bearish fundamentals. Meanwhile, physical traders face an oversupply situation, leading to aggressive selling. The market dynamics show herd mentality, where traders follow each other, causing rapid price movements without substantial trading activity. Jonah compares this scenario to past market behaviours in credit and crypto markets, emphasising that the current range-bound state has pushed momentum traders into uncertain territory. Despite the bearish sentiment, they suggest that a small event - like a refiner stepping in - could cause a swift price rebound, advising caution.
#oott #geoplitcalrisk #oilandgas #Israel #Iran #MiddleEast #Oilmarkets #bearish #beartrap #straightofHormuz
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This week, James Brodie and James Todd dive into the latest developments in the global economy, inflation, and U.S. politics. They begin by exploring weak Chinese economic data and discuss how China's worsening deflationary environment and a disappointing stimulus package announcement could impact global markets.
They break down the latest U.S. inflation figures, with the CPI falling to 2.4% YoY but exceeding expectations. They also analyse insights from the recent FED minutes and comments from Goldman Sachs, discussing the Fed’s outlook on inflation and the rate cut trajectory priced by the OIS and bond markets.
James Brodie and James Todd address the oil market's high volatility, fuelled by rising Middle East tensions and the Pentagon’s recent announcement of military support for Israel against Iranian threats.
In the second half of the episode, Onyx Head of Recruitment, Matt Aspin, joins to provide insights into the upcoming U.S. election. Matt delves into the latest polls and betting odds, revealing a tight race, with Harris leading in polls but Trump ahead in betting odds. Matt draws comparisons to the 2016 election and assesses the accuracy of these predictions and what they could mean for the 2024 race.
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For a special episode of Oil Insights, Harry Tchilinguirian, Head of Research at Onyx Capital Group, is joined by Paul Horsnell, Managing Director and Head of Commodity Research at Standard Chartered. Paul is a veteran of oil market analysis, and his views are widely sought-after when it comes to gaining insights into the turbulent world of oil market dynamics. Paul previously occupied similar functions at Barclays, JP Morgan, and the Oxford Institute for Energy Studies.
This episode of Oil Insights focuses on the recent escalation of geopolitical tensions in the Middle East following Iranian strikes on Israel on 1 October and why this time, it is different. Harry and Paul explore how these developments have shifted market attention away from oil fundamentals, notably from oil demand growth views this year and next. The episode further explores what options are available to OPEC+ when plotting their next move regarding supply policy and returning barrels to market. Within non-OPEC+ countries, we discuss US oil supply and growth prospects for US shale as the sector has seen a considerable transformation since the days of ‘drill, baby drill’.
We would be remiss if we did not discuss where oil prices are headed in the current volatile environment, so we also peer into the crystal ball to see where Brent might be headed next.
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In today's episode of The Officials, Jorge, Harry, Ed and Will discuss geopolitical tensions in the Middle East, involving Israel, Iran, and other regional players, as well as the broader economic landscape and its effects on oil prices.
Jorge recounts his recent travels to the region, noting observations of missile attacks and the vulnerability of Israeli defences. Jorge emphasises the strategic restraint by Israel, likely influenced by the U.S. due to upcoming elections and broader regional stability concerns.
The Officials also discuss the fait of the Strait of Hormuz, a critical passage for global oil supply, could lead to severe economic disruptions impacting not only Middle Eastern countries but also major consumers like China and India. While geopolitical risks are elevating oil prices, without further escalation, prices may stabilise or even drop.
The team also addresses global economic dynamics, such as China's recent monetary policy interventions aimed at stabilising markets.
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Group CEO Greg Newman is joined by Mirko Ivanda, Co-Head of Power & Gas from the Onyx Switzerland office, for a special episode of the CEO’s Address. Together, they explore the intricate dynamics of power trading, focusing on how geopolitics fundamentally shapes supply and demand as well as the end-cost of our household energy bills.
Mirko provides an in-depth analysis of the evolution of gas trading in Europe, shedding light on why Europe continues to receive gas from Russia through Ukraine, even amidst the ongoing Russia-Ukraine conflict. Greg and Mirko have an open conversation on why gas, unlike oil, faces different sanctions — particularly when originating from Russia — and the implications for Europe's current energy landscape.
The discussion emphasizes the critical role of energy consumption in the global economy, with Greg and Mirko delving into how geopolitics and domestic policies are crucial determinants of the final cost reflected in our energy bills. -
The week started with weak data, with global manufacturing PMIs contracting for the third straight month in September and with new orders dropping globally at the fastest rate in 11 months. But then services PMIs data surged higher, with the U.S. data at 54.9 (est 51.7) an 8-sigma beat.
On Friday, payrolls unexpectedly surged +254K, way above expectations and the unemployment rate fell to 4.1%. Despite being fuelled by 785k government jobs, U.S. yields surged along with the dollar. The 2 year yield had its largest weekly gain in 2 years, and USDJPY its biggest weekly gain in 15 years.
European data on the other hand continues to weaken and with Eurozone inflation now at 1.8% (below the ECBs 2% target) expect more aggressive rate cuts in Europe, and a weaker EURUSD. With Middle East tensions rising, and China back from Golden week holidays expect more volatility this week.
Uncertainty in the middle east has led to a an increase in risk premiums and rises in crude oil prices. As costs of inputs increase the average consumer's struggles will likely increase.
Key data releases this week are:
Earnings week
Wednesday- FED minutes, 10-yr bond auction
Thursday - US CPI (est 2.3%), German retail sales
Friday - U.S. PPI, consumer sentiment, UK GDP & IP, Canada payrolls -
Jorge is live from Dubai and discussing Iran's attack on Israel with locals. The attack against Israel came as no surprise. Talking to the people in Dubai, they feel Iran was very measured in their actions, going after military assets - not civilians - and the general feeling is that Israel is the wild-card.
The question on people's lips right now is: What will happen next? Prior to the attack, the oil market was within touching distance of the upper-60s and, with the news of the attack, rose to the mid-70s. While oil prices had a very strong reaction to the attack, with flat-price Brent rallying all the way up to $76/bbl, after the EIA release, there was a bearish response in price action, but geopolitics are still in the driver's seat, with Brent settling into the mid-70s.
Jorge, Will and Edward weigh in on the events in the Middle East, weak economic data and what two of the most important straits to move oil in the world coming under threat of closure, will mean for the oil market.
This episode was recorded at 4pm BST on 3rd October, 2024.
#macro #macronews #finance #inflation #deflation #stockmarket #stocks #oott #commodities #oilandgas #oil #trading #markets #marketanalysis #derivatives #derivativestrading #economy #economics #iran #israel #middleeast #middleeastconflict -
After the Brent front-month December contract started the day (UK time) testing the $70/bbl handle - seemingly ignoring tension in the Middle East - the market's flipped. The contract is trading above $73/bbl at time of filming after a Tweet led to a headline that an Iran strike on Israel may be imminent. Group Head of Research Harry Tchilinguirian gives his assessment of the situation.
Will we see more headlines like this? Will Brent continue to go up? Time will tell, but one thing's clear: One headline can make all the difference.
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The market is falling out of bed this morning!
Group Head of Research Harry Tchilinguirian analyses the current market, with the Brent front-month December contract testing the $70/bbl handle, the market seemingly disregarding tension in the Middle East, participants going net short based on macro developments in China, and more factors.
What direction will Brent go as the day continues? Stay tuned for updates! -
Last week, there was a string of aggressive stimulus announced in China. Existing mortgage loan rates cut, 7-day reverse repo rate dropped by 20bps, minimum downpayment requirement for second homes falling to 15%. Simultaneously, China announced it will allow securities firms, funds and insurers to tap PBOC funds to buy stocks. We have seen the CSI 300 stock index rally significantly accordingly... but will this strength last, and is it representative of a strong Chinese economy? The Answer: No! Follow along as we discuss this and more.
In Europe we have seen rate cuts in several non Euro nations - whilst HSBC are forecasting continued rate cuts from the ECB. US Data is mixed as we see the reaction to the FED's 50bp cut unfold - mortgage applications have increased & US stocks' strength continues. However employment data indicates that everything is not well.
S&P & Gold's momentum remain strong as Gold continues to exceed previous all-time highs. Brodie and Todd also discuss the ongoing events in the Middle-East & the impact on macroeconomics, EURJPY, Bitcoin's progress, and more.
Key data releases this week:
Monday: Chicago PMI, FEDs Powell speaks
Tuesday: U.S. ISM mfg PMI, JOLTS
Wednesday: ADP payrolls
Thursday: ISM services PMI
Friday: U.S. payrolls jobs report -
Jorge is back from Asia, and his findings from Singapore, China and Vietnam are stark. Building construction and industrial demand has slowed down significantly. The slow-down in China is serious, and the West is yet to see and understand the enormity of the change.
The noise on the streets of Shanghai is no longer the sound of motor engines, but just tyres on the road, as around 70% of the cars in the roads in China are now EV's - which has led to a complete down turn in gasoline demand.
With an already short market hitting $69/bbl last week, we must ask, how much shorter can the market get? Secondly, how will OPEC+ manage supply when the demand growth in Asia just isn't there?
Director of Benchmarking, Jorge Montepeque, Group Head of Research, Harry Tchilinguirian and Research Analysts Will Cunliffe and Edward Hayden-Briffett delve into the future of gasoline demand in Asia and what this means for the market.
A note from Jorge: https://www.youtube.com/watch?v=VScSEXRwUqQ
The End (Song by The Doors)
This is the end
Beautiful friend
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I'll never look into your eyes again
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This episode of Oil Insights was recorded on 25th September, 2024 at 10am BST. Onyx Research Analyst Mita Chaturvedi and Research Associate Martha Dowding join Group Head of Research Harry Tchilinguirian to discuss the week that was and the week to come in the oil market.
In this week's episode, Harry Mita and Martha unpack recent price movements in Brent and the tumultuous couple of weeks since the APPEC meeting in Singapore and the Fed's decision on rate cuts. As we continue to see Brent settle in the low-to-mid-$70/bbl range, the team discuss their personal bullish - or bearish - outlooks. They also take a look at CTA and managed-by-money positions.
This week's product of interest is gasoline; Harry and Martha analyse what's been driving the sell-off in cracks, regional contrasts, how Cal25 is shaping up, and more.
We’d love to hear from you! If you’d like to get involved with our podcast, please leave a comment on this video on our YouTube page. You can also listen to the podcast on Spotify, Apple Music, or Google Play.
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Last week, the Federal Reserve announced a hawkish 50bp cut, with Jerome Powell stating the US economy is strong after data beat expectations. Meanwhile, the unemployment rate surpassed the 36-month average - reaching levels previously seen during economic recession - and US home sales fell to their second-lowest level in 14 years.
In Europe, the German economic data is looking woeful and continues to fall, with chances of a technical recession increasing. Poland, however, is seeing strength as GDP per capita soars. In Asia, China's Tier-1 City Property Index is 28% off its highs, and Singapore and Taiwan's electronic exports are surging.
S&P and gold are at all-time highs. Brodie and Todd also discuss bearish diesel, AUDNZD yields, USDJPY, and more.
Key data releases this week:
Monday- U.S. flash PMIs
Tuesday - U.S. consumer confidence, RBA rate decision
Thursday - Core PCE inflation
Friday - BOJ rate decision, UK & Cad retail sales -
Senior Oil Derivatives Trader, James Anderson joins Group CEO Greg Newman to discuss the oil market’s significant reset, with crude futures prices dropping by approximately $10/bbl over the past few weeks.
Greg and James debate the collective sentiment within the oil industry, noting how many traders follow the herd, seeking comfort in the analyses of research houses and banks. This creates a battle for narrative dominance—who will be the market's lead forecaster?
The recent sell-off raises important questions: how much of it was driven by macroeconomic factors versus a shifting outlook within the industry?
The year started with bullish sentiment toward Q3, with summer flat prices and gasoline being key trades. However, forecasts have since shifted, with weakening demand now projected for 2025. This divergence between the IEA and OPEC outlooks has been accompanied by weakness in the Cal 25 spreads, raising questions about the market's consensus view for next year.
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All Chinese data is coming out weaker than expected, with unemployment rising to 5.3% and the economy entrenched in deflation with the GDP deflator declining for its fifth consecutive quarter. The Chinese CS300 equity index is trading at it's lowest level since 2019, and property shares have declined by over 90% in just 4 years.
James Brodie and James Todd focus on the upcoming Federal Reserve meeting; will they cut 25bp or 50bp? They also investigate the betting odds for Trump and Harris in regard to the upcoming election, and also discuss the weak sentiment for U.S. small business. A NFIB small business survey showed the second-lowest reading since 1985, where only the GFC was worse.
Onto commodities, gold made an all-time high, reaching $2,466. Meanwhile, USDJPY and the U.S. 2-year bond yield make new cycle lows.
Key data releases this week:
Monday- NY Empire manufacturing data
Tuesday - U.S. retail sales, Cad inflation
Wednesday - U.S. Fed FOMC rate decision
Thursday - Aussie employment, BOE rate decision
Friday - BOJ rate decision, UK & Cad retail sales -
This episode of Oil Insights was recorded on 10th September, 2024 at 11am BST. Research Associate Vincent Wu guest hosts alongside Research Analyst Mita Chaturvedi as Harry Tchilinguirian attends APPEC in Singapore.
In this week's episode of Oil Insights, Vincent and Mita delve into the current state of the oil market and discuss the potential for a significant price reversal given the ultra-short positioning by money managers, including CTAs. Amid prevailing economic uncertainty, sluggish Chinese demand and the anticipation of additional OPEC+ barrels, bulls seem to have given up as the market accepts a lower flat price environment.
The team discusses OPEC+ strategy as of late, alongside the downgrading of forecasts by trade houses and Wall Street banks, and more. They also focus on the LPG market as this week's featured product. Mita explains how shifting to winter specification gasoline blending has injected new support into butane, while international propane saw a standout performance this week despite a bearish futures market.
We’d love to hear from you! If you’d like to get involved with our podcast, please leave a comment on this video on our YouTube page. You can also listen to the podcast on Spotify, Apple Music, or Google Play.
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James and Will discuss weak U.S. ISM manufacturing. New orders fell to 44.6 points from 47.4 in July, experiencing contraction for the 3rd straight month. The prices paid index jumped to 54.0 points from 52.9 in July, expanding for the 8th month in a row. Inventories unexpectedly surged the most in the past decade.
There’s weak employment data out of the U.S. with just 142k jobs created in August. Full-time work is rapidly decreasing (-438k), while part-time work is up (+527k). An All-Time High (464,000) Americans are now working 2 full-time jobs.
German IP is now 9.5% below February 202, Nvidia has dropped 28% since its peak and New Zealand house prices fall for the sixth consecutive month.
Key data releases this week are:
Tuesday - U.K. employment, IP, monthly GDP
Wednesday - U.S. CPI
Thursday - U.S. PPI, ECB rate decision (25bp cut fully expected)
Friday - U.S. consumer confidence, Chinese money supply - Vis mere
