Summary

Oil draws will happen faster than markets expect and the US is likely to regret not restocking their SPR reserves in Q1. Demand is likely to remain strong, but growth will come from India, China and Asia. There is little supply growth to offset Russian decline.

Russian crude exports are rising with oil previously transported by pipeline now loaded on ships. Their oil products will find it tough competing with refineries in India and China and export routes are longer and full of logistical hurdles. Kathleen is bullish natural gas with demands for cooling capacity in industrials increasingly important.

Despite the war in Ukraine, food supplies remain adequate with yields having risen globally and Brazil may soon be world’s largest corn exporter with their Safrinha crops thriving.

In metals, Kathleen prefers silver to gold with physical demand peaking. Gold has seen high levels of Central Bank buying, led by China, but a slowing in physical demand.

Kathleen prefers Platinum to Palladium with the former having underperformed for so long because it was associated with diesel internal combustion engines, but now it has some support from the hydrogen side. Despite moving higher the ratio remains low historically, presenting a good opportunity.

Supply is also picking up in most industrial metals, with copper demand is set to lag supply growth in the next 2-3 years.

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