In today’s briefing:
- [ETP 2025/21] WTI Slips on Oversupply Fears, Henry Hub Hit by Mild Weather and Storage Surge
- The Drill – The Commodity “Super”cycle
- PMI Goods Vibes
- CX Daily: Chinese Tech Giants’ Struggle to Power AI Data Center Boom
- Agricultural Flows Monitor: May 2025 Issue
[ETP 2025/21] WTI Slips on Oversupply Fears, Henry Hub Hit by Mild Weather and Storage Surge
- For the week ending 16/May, U.S. crude inventories grew by 1.3m barrels (vs. expectations of a 0.9m barrel fall). Similarly, gasoline and distillate stockpiles unexpectedly rose.
- The EIA reported a 120 Bcf storage build, exceeding analyst forecasts of an 118 Bcf increase. Storage levels are 3.9% above the five-year average.
- Barclays initiated coverage on Saudi Aramco with an ‘Overweight’ rating. Jefferies downgraded BP to ‘Hold’ from ‘Buy’, and Citigroup lifted its price target on Occidental Petroleum.
The Drill – The Commodity “Super”cycle
- Greetings from Copenhagen.
- We’ve previously advocated a long tilt toward commodities, as both the U.S. and global growth outlooks are being repriced amid the reopening of trade and the sudden realization that the U.S., China, and even Europe have collectively slammed the deficit accelerator—rather than the brakes.
- Everywhere you look, countries are ramping up fiscal spending to cushion the blow of tariffs.
PMI Goods Vibes
- Broad improvements in the flash manufacturing PMIs demonstrate ongoing resilience relative to consumers’ bad vibes. Goods trade seemingly shrugged off the tariff shock.
- The UK was alone in weakening, but it is more susceptible to bad vibes, showing more noise than signal. April’s spurious lows were revised away and may repeat or rebound.
- Transmission to unemployment also isn’t happening, leaving little case for easing unless recessionary pressures build, and the PMIs still hawkishly suggest that isn’t the case.
CX Daily: Chinese Tech Giants’ Struggle to Power AI Data Center Boom
- Power / In Depth: Chinese tech giants’ struggle to power AI data center boom
- Tariff /: China’s EV-battery makers get only temporary relief from U.S. tariff truce
- Crypto /In Depth: Are Hong Kong’s crypto licenses worth it?
Agricultural Flows Monitor: May 2025 Issue
- Wheat: Futures at $4.90/bushel (lowest since mid-2020), reflecting ample global supply and subdued demand. U.S. production is projected to rise by 2% in 2025, though exports are expected to struggle against strong Russian competition.
- Corn: Prices fell from $4.82/bu in April to $4.46/bu in May, driven by robust U.S. planting and higher production estimates from Brazil and Argentina. Despite the dip, USDA’s forecast of the lowest U.S. ending stocks in three years underscores tightening supply.
- Soybeans: Climbed to $10.80/bushel in early May, the highest since July 2024, supported by U.S.-China tariff adjustments and solid Chinese demand for South American soy.
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