General news

  • Scientists are becoming increasingly concerned that the melting of the Greenland ice sheet could accelerate and as a result raise sea levels more than expected
  • Despite Trump’s opposition, the US House of Representatives has voted to impose fresh sanctions on Russia including placing new restrictions on oil and gas projects which could affect the Nord Stream 2 pipeline from Russia to Germany; fresh sanctions will also be imposed against North Korea and Iran
  • The UK government has announced it is to move to ban new petrol and diesel cars in the UK from 2040; the announcement is in line with a global acceleration towards electric cars and follows similar announcements from President Macron that France will also phase out diesel and petrol cars from 2040. Volvo announced that all its models will be electric by 2019, and most recently BMW announced a fully electric Mini will be built at Crawley, UK starting next year
  • The start of last week saw the weakness of the USD continue to help boost dollar-priced commodities; the dollar however is now showing signs of finding some support


  • Despite several years of bumper harvests which lifted supplies of wheat, corn and barley, the recent drought conditions in North America, the EU and Australia have led the International Grains Council (ICG) to cut its output and inventory forecasts to 3-year lows; the ICG also stressed particular concerns about the outlook for supplies of premium grade milling wheats
  • Prices for high-protein wheat hit 4-year highs following the damage caused to US crops by the lack of rain and above normal temperatures. Bakers, flour millers and agricultural traders are now also becoming increasingly concerned that Canada and Australia, who have also fallen victim to adverse growing conditions, will be unable to provide their normal “supply cushion”
  • Sugar futures have dropped lower following data that showed Brazilian mills are accelerating production faster than expected after a boost in harvesting and crop quality - thanks to a spell of dry weather
  • Coffee growers in parts of Brazil are struggling to cope with the largest beetle infestation in recent memory; the beetles have been able to flourish for decades since the ban on the use of a pesticide 40 years ago
  • Despite the recent agreement between China and the US which would open the Chinese market for US rice, the Chinese Ministry of Commerce (MOFCOM) has made it clear that further approval needs to be gained before US rice can start entering the Chinese market
  • UK’s environment secretary Michael Gove has insisted that the UK will not compromise on its animal welfare standards in the interest of trade; the statement comes following Brexit discussions in which the UK would be given a choice as to whether or not they would retain the ban on importing chlorinated chicken from the UK
  • Following the US ban on importing beef from Brazil, the country is now considering changing the formula of its foot-and-mouth vaccines
  • Japan is to raise the tariffs imposed on imports of frozen beef from the US, Canada and New Zealand from 38.5% to 50% starting next month as an emergency response to increasing shipments. The tariff increase is likely to be in place until March 2018
  • Brazil’s federal good inspectors have resumed protests this week at 100 inspection units including ports, airports and agricultural laboratories. The protests are over their belief that they do not have enough staff to ensure the safety of the country’s meat shipments
  • Brewers and hops merchants are becoming increasingly concerned about the supply and price of the upcoming bittering hops (also known as alpha hops) crop. These hops are used in mainstream beers. The recent drought conditions in Germany, the world’s largest exporter of the commodity, risks adding further pressure to a market which has already been tight over the past 4 years as a result of US farmers changing their acreage away from alpha hops to aroma hops, in order to cater for the boom in demand for craft beer


  • Shares in Acacia Mining fell 17% last week following the Tanzanian government’s demands of $190bn in unpaid taxes and fines; Acacia remain banned from exporting unprocessed ores following the government’s efforts to boost the domestic smelting industry with Acacia now warning that if it cannot reach a deal with the government by September, it is likely it will have to close the mine
  • Although zinc remains 8% up this year, high prices have unlocked new supply as a result of increased production in Eritrea, India, Peru and Turkey. Many investors expect the supply gap to be filled, which would consequently have a negative impact on prices
  • As with most commodities, China is likely to play a pivotal role in shaping how zinc will perform over the next 6 months. There is a possibility that will China once again rapidly ramping up production in order to take advantage of the higher prices
  • Copper prices have jumped to a 2-year high following news from China that the country is thinking about banning imports of scrap metal by the end of 2018, a move which will most likely boost demand for refined metals in China. The price increase has also been supported by a weaker USD
  • Copper prices held near this 2-year high in London following data which showed that Glencore’s copper output in the first half of this year fell by 9% as the company’s mining and trading houses focused on zinc production. Glencore stated this was down to the mining of ores with a lower copper grade and wet weather affecting throughput 
  • The latest Chinese construction data was upbeat despite weaker readings for growth in Chinese manufacturing and services sectors, leading to iron ore prices hitting a 4-month high
  • As we move towards a world in which our roads are dominated by electric cars, new resource conflicts are likely to arise as mining companies push to maximise the production of the metals needed. For example in Congo (where 60% of the world’s cobalt is produced) there is a risk that this nation, which has historically fallen victim to corrupt and violent business structures, will find itself relapsing into this pattern, putting its people at risk of not only not benefitting from their country’s own riches, but at risk of suffering as a result of it
  • Gold rose to a 6-week high last week following the US Federal Reserve’s decision to hold interest rates steady



  • The UK energy industry is gearing up to expect a surge in the number of electric vehicles on the UK’s roads following the UK government’s announcement that it plans to ban new petrol and diesel cars after 2040. The concern is that although battery and storage technology is developing, the surge in electricity demand that the uptake of electric vehicles will likely cause will need to be adapted to by the UK’s energy system. National Grid has warned that by 2030, electric cars could require 3.5-8GW of additional capacity, on top of the current peak demand of 60GW
  • The UK government has proposed several changes to capacity market rules to enable all technologies to compete on a level playing field when it comes to auctions. Proposed changes include 1) changing the way in which battery reliability is determined by modifying the way the de-rating factor for batteries is calculated (measure of reliability of a given generating technology), 2) separating storage into 8 different classes based on their discharge duration for future auctions, 3) allowing capacity providers to re-take metering assessments wherever necessary and 4) shifting the planning consent deadline to January in order to avoid the Christmas period
  • Ofgem has pushed back its deadline for delivering its decision on the implementation of mandatory half hourly settlement (HHS) for domestic and small non-domestic energy customers by over a year until the second half of 2019. This decision follows concerns raised by respondents to the November 2016 consultation regarding the timetable allowed for implementation
  • Ofgem and the government are being urged to deliver smart technology standards which protect against cyber security threats in the energy system; the emphasis on cyber security comes as discussions continue to focus on smart systems which are more complex, more driven by data, rely on communication technologies, and are in turn more susceptible to cyber risks
  • Ofgem has ruled out allowing distribution network operators (DNOs) to own and operate storage over concerns it could “impede the development of a competitive market for storage and flexibility services
  • Lightsource (solar developer) and Blackrock (asset managers) have announced plans to build up a £1bn solar portfolio over the next 3 years, with the expectation that installed capacity of the portfolio will reach 1GW
  • Ireland is exploring a range of options for increasing its energy security post-Brexit. Discussions have included a €1bn electricity link with France and a €500m import terminal for LNG. The discussions have been driven by the threat that the UK leaving Europe could physically isolate Ireland from the rest of the European energy market as a result of the country’s current imports all flowing via the UK
  • Centrica’s CEO has announced that the company have noted the rise in wholesale energy prices and that it will be taking this into account when it resets its retail prices next month following a 6-month price freeze
  • UKCS gas production is expected to drop this week as a result of major planned maintenance



  • Tensions between Russia/ Saudi Arabia and OPEC countries, who have failed to cut production in line with the OPEC-led supply deal, are rising with Saudi Arabia’s energy minister threatening to take the discussions beyond oil ministers and escalate them to more senior levels of government
  • Oil prices firmed last week thanks to expectations of a drawdown in US stocks, a slowing rate of shale oil production growth and the announcement from Saudi Arabia that they are to deepen their exports in August
  • Indonesia has announced they are open to re-joining OPEC as long as they are not forced into production and export cuts. The government hse said they would be willing to cut production but would want to not have to comply with the cuts “from time to time”
  • Conventional oil and gas producers are approving new projects at the fastest rate in 3 years (more new oil and gas fields were given the go ahead in the first half of this year than in the whole of 2016) indicating that “big oil” is fighting back against US shale producers. The ability of companies to proceed with new projects at this rate at the current low oil prices is thanks to the fact that average development costs are down 40% since 2014
  • Brent settled at $51.49 last Thursday, the highest closing price in 6 weeks; this was the first signal that the markets seem to “like what they’re hearing” as Saudi Arabia announce it is to cut producing to the lowest levels in 6 years starting next month, and the UAE saying that as of September it would trim oil allocations to customers by 10%, with the latter being particularly significant as the UAE has been to date guilty of “dragging its feet” in reducing output in line with the OPEC deal
  • Latest data indicates that US crude inventories have dropped by 26m barrels since the end of June due to the summer driving season (during which many Americans take to the road for vacations)
  • A sharp increase in profits from ExxonMobil and Chevron support signs that the world’s leading oil and gas companies are gradually recovering from the downturn of the past 3 years; some analysts have commented that this indicates that the industry “works” at an oil price of $50 following efforts by companies to reduce costs and increase efficiency
  • Despite the optimism, the US shale industry remains the biggest threat to OPEC being able to successfully end the 3-year price oil glut and most analysts are forecasting that OPEC will continue to struggle into 2018


  • Latest data from the US Department of Energy forecasts that US coal exports will jump by nearly a fifth by the end of this year with the proportion of US electricity from coal plants inching up from 30% to 31% in 2017, and staying there in 2018. This comes as coal continues to be burnt domestically but also shipped overseas for steel-making, despite the fact that US power generators are moving towards renewables and natural gas (against Trump’s efforts)
  • A study by Energizing India indicates that coal is likely to supply a significant share of India’s baseload power through 2047, despite the country’s renewable energy goals
  • A study published in the Nature Climate Change journal claims that the strategic deployment of new wind farms in Europe could almost eliminate weather-variability in wind power output. The study places the blame of intermittency issues on the lack of cooperation between European member states
  • France’s Engie has announced 3 new investments in decentralized energy projects in Cambodia, India and Latin America