\n\tBy Chris Shaw<\/p>\n
\n\tThe recent fall in US oil inventories appears to be accelerating, Barclays Capital noting relative to normal seasonal patterns the last seven weeks has seen oil product inventories in the US market decline by an average rate of 670,000 barrels per day.<\/p>\n
\n\tFactoring in the latest figures sees Barclays estimate the US overhang of oil product inventories is now just 32.9 million barrels. This represents a fall of 18.8 million barrels over just the past three weeks and 29.9 million barrels over the past seven weeks.<\/p>\n
\n\tAt the same time, Barclays notes there has been further upside surprise in global oil demand, which has caused the group to lift its forecast for 2010 to growth of 2.02 million barrels per day. This is a little higher than the US Energy Information Administration forecast of 2.0 million barrels per day and would be the second highest rate of growth over the past 30 years.<\/p>\n
\n\tWith demand growing faster than had been projected in the market, Barclays suggests the only way some lower projections such as those of the OPEC Secretariat and the International Energy Agency can be credible is if the path of oil prices is significantly higher than currently expected.<\/p>\n
\n\tAs both these sets of projections imply fairly tight oil markets by the middle of this decade, and given its own view of considerable upside to demand forecasts in coming years, Barclays Capital remains of the view there is still significant potential upside for oil prices. As evidence of this, Barclays has a 2015 price forecast for oil of US$137 per barrel, with which it remains quite comfortable.<\/p>\n
\n\tOn a shorter time frame, Commonwealth Bank is similarly bullish on the outlook for oil prices, as it suggests the combination of falling US inventories and a likely US consumer recovery should boost demand further over the next 6-12 months.<\/p>\n
\n\tThis should further tighten the global oil market in Commonwealth Bank's view, which supports its expectation the oil price will lift closer to US$100 per barrel over the next year or so.<\/p>\n
\n\tTurning to the agricultural commodities, Barclays Capital notes prices have continued to push higher in recent months on the back of ongoing production downgrades, strong demand, export curbs and declining inventories.<\/p>\n
\n\tWhile the current high prices should act as an incentive to plant additional acreage in coming months, Barclays suggests it will be price attractiveness of crops relative to each other that decides the battle for acreage into the US planting season.<\/p>\n
\n\tFrom a demand perspective, Barclays suggests the recent uptrend in Chinese grain imports is primarily a reflection of near-term supply concerns. Inflationary expectations moving higher on the back of higher food prices is also a serious concern in developing countries, Barclays highlighting this by noting it is causing governments to intervene or to put export curbs in place in various markets.<\/p>\n
\n\tThis combination of tighter balances, strong demand and more nervous markets should keep interest in agricultural markets high according to Barclays, especially given there are also some broader shifts in consumption patterns underway.<\/p>\n
\n\tAs with the agricultural commodities, stocks levels are also declining in the European and Chinese coal markets. Barclays again notes this is a result of a combination of demand continuing to surprise to the upside and ongoing supply issues. The supply side problems are a combination of infrastructure constraints and the impact of bad weather restricting supplies from Colombia, Australia and Indonesia.<\/p>\n
\n\tCoal burn across Europe was again strong in October and Barclays notes it continues to run at a little above 2009 levels, so sustaining demand in this region. Chinese re-stocking has kept Asian demand solid as well, this re-stocking for winter again coming earlier this year than is usually the case.<\/p>\n
\n\tUntil this re-stocking process is complete, likely in the next few weeks, Barclays sees scope for further short-term upside to coal prices. Attendees at a recent Coaltrans conference tend to agree with this view as Barclays notes forecasts were for average prices to post further moderate gains in 2011.<\/p>\n
\n\tThe Barclays view is shared by Commonwealth Bank, which noted last week spot thermal coal prices ex-Newcastle rose above US$100 per tonne for the first time since June of this year. While price gains for Australian suppliers have been limited by the stronger Australian dollar, this upward pressure on thermal coal prices should continue in the bank's view given the market is entering the peak demand season.<\/p>\n
\n\tIn some cases the increases in demand have come early, as Commonwealth Bank notes for example demand in China is being boosted by the early onset of winter in some parts of that country. With major suppliers being hampered by heavy rainfall the bank expects markets will remain tight over the near-term, so supporting prices.<\/p>\n","protected":false},"excerpt":{"rendered":"
A glance through the latest expert views and predictions about commodities with recent data positive for stronger oil and agricultural commodity prices and signs global coal markets remain tight.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[32,27,89,24,88,26],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57425"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57425"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57425\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}