We've got oil hovering above one hundred dollars a barrel this is despite the slowdown in its top importer. As you say as we
say rather you are seeing some further upside. But what would oil prices look like if we didn't have these lockdowns in China.
And how much is that complicating the picture. Yeah well I certainly think the market is assuming you know that
the lockdowns resulting in significant heat to demand and in a sense offsetting you know the potential supply shortfall that we
may see from both the EU ban on Russian oil but also you know the lack of growth that we're that we're getting out of OPEC
group as well. And you know we're talking of a see you know 2 to 3 million barrels a day. I mean our estimate of the demand heat
in China is only about one million barrels a day at the moment. But obviously it has potential to grow if we do say that
outbreak really spread across the rest of the country. And those lockdowns
really really start to bite. But you know it is a very complicated picture. And I think in the shorter term where we're
going to see you know this this high level of volatility until there's a little bit more clarity around what you know the
supply and demand outlook looks like. But you know for us you know the second half of the year looks extremely tight. I mean
we do expect obviously China the outbreak in China to eventually ease and we see demand recover quite strongly just as we've seen
in other regions around the world post you know those lockdown periods. And that will come at a time when the EU is pulling
back on Russian oil and we have very little inventory to really buffer that that tightness.
So you've got a year end target for Brent 120 dollars a barrel by the end of the year. When you're talking about hopefully some
kind of rebound from China in particular by the latter part of the year what does that mean for your view on the overall
commodity complex. Well I mean they've been pretty clear in China that you know
they'll support economic growth with a continued sort of stimulus measures and you know that I think that bodes
relatively well for that for the wider complex although they'll clearly be some some cautiousness from from commodity markets
considering that the previous efforts haven't been that successful. But I do think that it will provide just a fillip
for markets which have been obviously just languishing in recent times. So you know we have a pretty positive view then on on the
metals complex and even iron ore and steel as a consequence of that that government support that we expect to see come through
in the second half of this year. And looking at the whole gamut here a lot of this is naturally
come from what we've been seeing in Eastern Europe and especially food prices now. How high can they go. And is there
any way of perhaps mitigating that. Yeah well that's that's a tough one. I think you know we're
getting a perfect storm in a sense where the supply disruptions are really quite significant. And at the same time you know
demand is is certainly quite strong. So it's hard to see how we get out of this situation. I mean there are you know inventories
relatively high inventories certainly compared to other commodity markets which will certainly help alleviate some of
that pain in the shorter term. But you know they'll have to be re restocking in coming sort of months or years as well. And if
these supply side issues really persist then you know it's hard to see how
agriculture and food prices will diminish in the short term. So you know that has obviously quite significant implications for
the wider economy and within commodity markets as well. So you know we think this once again you know probably little downside
in the medium term on that on that side. Very quick word on before we do things on energy. And you know
with the European Union sanctioning Russian crude oil where does that leave that oil to go now.
Yeah as I said I think the market is is still you know unsure on how the demand picture looks in China. So I think yeah we'll see
things relatively volatile. But you know as those sanctions come into place and the Europeans have obviously said it'll be a
phased approach so we won't see that tightness emanate. Yeah. Quit all at once in the shorter term. But as that builds we
expect to see prices continue to to grind higher more. You know two steps forward one step back type of scenario. But yeah you
throw in other things like you know the US Department of Energy restocking its strategic reserve. You know it really bodes for
an extremely tight market. So we do see prices continuing to to a higher from here.
Danny we're seeing daily power blackouts in the likes of India and Pakistan. How much worse do you think the global power
crisis could get. You know I think this is at the crux of the of the issues at the
moment is you know these are these obviously weather events. You know we've seen obviously some cold winters in previous years
really hit the energy complex. And now we're seeing these heatwaves in India really push energy sinks simple systems to
the brink. And look there's there's no really easy way out of it. I mean obviously a lot of the the energy complex is is being
pushed into increasingly few options I suspect to really boost output. I mean India
itself is going to have to delve more into LNG and coal as a consequence of that. And I suspect Europe is the same as well so
far for electricity prices globally. It's once again you know it's going to be this constant upward pressure as as utilities
look to to higher priced fossil fuels in a sense to really you know expand that generating capacity that they're really pushing
at the max at the moment.