Policy error and cyclical recovery to benefit commodities

James Butterfill -

The US Federal Reserve (Fed) has made a policy mistake. After raising rates for the first time in nine years, the Fed has held back from further hikes in 2016, bowing to market tantrums. The Fed is struggling to focus on the strength of domestic fundamentals such as the strong… Read More »

Oil, back to balance?


Over the last three weeks oil markets have peaked. The Brent oil price has gained 30% and is currently trading at USD 40.50/ bbl. There are three reasons for this rally: rumours of a possible agreement between oil producers to control output, signals that non-OPEC production is falling, and the… Read More »

A distinct shift leaves oil lower … for longer


The price of energy and oil, more specifically, is so heavily determined by shorter-term, cyclical factors that constructing an actionable longer-term view is challengin Despite that, a number of influencing factors are likely to endure for some time: further enhancements to drilling technology, continued environmental pressure, and increased development and… Read More »

Commodity prices bottoming out


Major commodity prices are showing signs of recovery. Both oil benchmarks along with most metals have been posting positive returns for at least the third consecutive week. Silver inflows begin to track gold inflows. Last week investors continued to pile into gold ETPs for the 9th consecutive week, recording inflows… Read More »

Oil & Gas: Restarting from a lower base


Updating Barclays Brent oil price forecast to $40/$55/$70 over the next three years does not alter our outlook for the challenged European E&P sector. For 2016 the goal is survival while ensuring portfolios are positioned to benefit from an eventual oil price recovery. We continue to view sector valuations as attractive… Read More »

Gold miners caught in a value trap

James Butterfill, Aneeka Gupta -

Gold miners are historically very cheap but at this juncture are likely to be a value trap due to profitability concerns We find ourselves starting 2016 with heightened market volatility. A global sell off in financial markets has pushed up gold prices by 2%, while gold miners have fallen by… Read More »

Stress testing Russian Oil & Gas Big 4


$30/bbl oil price creates challenges for the Russian economy and the Big 4 oil and gas firms Russian government income is weakening as the oil price falls, both in USD and RUB, adding budgetary pressure. This has led to the imposition of additional taxes on the oil and gas sector… Read More »