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Energy & Commodities Outlook: Q1 2021

Top Papers on the Outlook for Energy and Commodities

2020 was a strange year and this statement holds especially true for the commodities sector. It was year that saw both a new all-time high for the price of gold and a new all-time low for the price of oil. Sales of renewable energy equipment rose tremendously, while the exploration and production of oil and gas resources suffered. So, what does 2021 hold in store for energy and for commodities markets?   

In the list papers below curated by Savvy Investor, UBS AM discusses the role of gold and other commodities as an inflation hedge. Lane Clark & Peacock, on the other hand, analyses the economics of battery investments. Meanwhile other papers in the list examine carbon intensity, the environmental implications of commodity extraction, and a host of other themes.

oil rig

The Aspirational Case for Integrated Energy (Wells Fargo AM, 2020)

For compliance reasons, this paper is only accessible in certain geographies

Despite the recent slump in US energy, Wells Fargo AM urges investors to reconsider their views of the sector, especially in light of recent adaptations which are being made to cope with decarbonisation.

Gold Market Outlook (World Gold Council, Jan 2021)

For compliance reasons, this paper is only accessible in certain geographies

World Gold Council expects a recovery in gold production in 2021. On the demand side, they split their analysis into investment demand and consumer demand, which are both supported by a variety of macroeconomic factors.

Silver Outlook to Q4 2021: A year for the hybrid metal (WisdomTree Investments)

For compliance reasons, this paper is only accessible in the UK & Europe

Silver rose an astounding 47% in 2020. Although strongly correlated to gold, the metal is used much more broadly in industrial applications. Thus, it plays both a cyclical and defensive role for investors. WisdomTree reveals more about the characteristics of silver in this 2021 outlook.

Hydrogen: Back to the future (Aviva Investors, 2020)

For compliance reasons, this paper is only accessible in certain geographies

This paper by Aviva Investors explores how recent technological innovations could do three things: lead to advancements in hydrogen storage and transportation, pave the way for green hydrogen production, and present a better path towards net-zero emissions.

Alternative Investments: Improving portfolio performance (UBS AM, 2020)

The sixth section of this paper by UBS AM discusses the role of gold and other commodities as inflation hedges. It also examines their utility value as alternative assets within multi-asset portfolios.

Is Battery Storage a Good Investment Opportunity? (LCP, 2021)

In this paper, Lane Clark & Peacock analyses the four revenue streams available to battery storage investors: balancing, arbitrage, frequency response, and capacity provision.

A Transformational Framework for Water Risk (DWS, 2020)

DWS Group highlights the significant economic opportunity that exists if the UN SDGs associated with water are to be met. Water is one of six systemic risks identified by the World Economic Forum.

Investing During the Energy Transition (PGIM IAS, Dec 2020)

The author of this paper reviews the performance of energy subsectors in 2020, conducting economic scenario analysis and estimating other macroeconomic sensitivities.

ESG and Climate Implications for the Mining Sector in Africa (DLA Piper, 2020)

The topic of consideration in this edition of DLA Piper's Africa Connected magazine is ESG and climate-related implications for the African mining sector. World Bank sanctions and other regulatory concerns are also discussed.

Are Asian Companies More Carbon Efficient? (S&P Dow Jones Indices, Jan 2021)

The S&P Global Carbon Standard is a metric that gauges the carbon intensity of companies. It is used in a variety of carbon-centric indices but can also be used to perform other types of carbon analysis. This paper explains further.

Gold $3,000? (Enterprising Investor, 2021)

The authors of this brief article use the historical behaviour of gold over the past 20 years to formulate a model, with which they then forecast three scenarios for near-term gold prices.

Jan 2021 Short-Term Energy Outlook (US Energy Information Administration)

The US Energy Information Administration presents a comprehensive view of energy markets as of January 2021, including data on the global demand and supply of oil.

Energy in 2021: An ESG-informed outlook (Eaton Vance)

For compliance reasons, this paper is NOT accessible in the United States and Canada

Eaton Vance delivers a brief outlook for the energy sector in 2021, paying particular attention to ESG considerations that are relevant for this sector.

The Q4 Oil, Gas and Coal Rally: A dead cat bounce? (FTSE Russell, Jan 2021)

The oil and gas sector was one of the highest performing sectors in the Russell 2000 Index during Q4 2020. But what were the factors that led to this performance and can it be sustained in 2021?

Commodity Market Inflection Points in 2020 (S&P Dow Jones Indices, Jan 2021)

In addition to gold's new all-time high and oil's new all-time low (which were both reached in 2020), S&P Dow Jones Indices reviews inflection points in the commodity markets last year.