OPEC Monthly Oil Market Report – November 2017
Energy commodity prices generally increased in October, led by higher crude oil prices. Natural gas prices
showed mixed trends, decreasing in the US, but advancing in Europe while coal prices remained relatively
stable. Base metal prices reached the highest levels since October 2014, with further gains in global
manufacturing. Gold prices declined on the increasing likelihood of interest rate hikes by the US Federal
Reserve in December.
Trends in selected commodity markets
increased by around 3.3% in October and have been around 24.4% higher in the
January-to-October period compared with the previous year.
In October, the
Henry Hub natural gas index
was down by 10ȼ, or 2.7%, to $2.86/mmbtu, after trading at
an average of $2.96/mmbtu in the previous month. Average prices have ranged between $2.9 and
$3.1/mmbtu since June. The EIA said utilities added 65 bcf of working gas to underground storage
week ending 27 October 2017. This was above the median 60 bcf injection expected by analysts. Total
working gas in underground storage stood at 3,775 bcf, 4.6% lower than at the same time the previous year,
and 1.1% lower than the previous five-year average. In October, the
US Climate Prediction Centre
issued a La Nina advisory with a 65%-75% chance through winter in the Northern hemisphere. This
phenomenon is normally associated with below average temperatures in the northernmost regions of the US
and the opposite pattern in the southernmost regions of the country.
Natural gas prices
increased with average prices up by 10% to $6.08/mmbtu. Natural gas inventories for EU Member States
increased to 89.9% full at the end of September from 84.6% in the previous month, slightly below last year’s
end-of-September inventories at 90.6%, according to data from Gas Infrastructure Europe.
Australian thermal coal prices
advanced slightly to $97.1/mt. Raw coal output in
in September was
7.6% higher y-o-y versus 4.1% higher y-o-y a month earlier, however output is expected to decelerate in the
following month, due to a push by the government of China to reduce pollution during winter months. As
many other heavy industries are expected to limit their output as well, coal demand will likely decelerate. The
last available import data shows a decline in Chinese coal imports to 21.3 million mt in October, from
27.1 million mt in September, though this year they are still 12% higher in the first 10 months, compared to
the previous year.
Table 2 - 1: Commodity price data
During the month,
average base metal prices
increased by 2.7% reaching the group index highest since
August 2014, supported by continuing strength in global manufacturing. The JP Morgan global
Aug 17 Sep 17 Oct 17 Oct 17/Sep 17
Crude oil, average US$/b
Natural gas, US
Natural gas, Europe US$/mbtu
Note: * World Bank commodity price indices (2010 = 100).
Source: World Bank, Commodity price data.