Commodities Update: Estimates for growth in oil production revised down, metals ex-gold, silver & copper expected to rise

Analysts of publicly traded oil and gas companies are predicting that oil production will rise 4.7% for Q1 2014 and 7.9% in Q2. These projections are down from 7.2% and 9.8% at the beginning of March. Analysts expect oil prices to fall for both the WTI and Brent benchmarks over the next two years before stabilizing.

Though the Henry Hub benchmark price has dipped 5.1% over the past month, analysts are projecting double-digit, year-over-year gains to producers’ realized prices in Q1 and Q3 2014. Year-over-year growth in natural gas production is expected to be less than 2% through Q3 2014.

Analysts are predicting capital expenditures of public energy companies to grow at 2% or less year-over-year through at least Q3 2014. In addition, operating expenses per barrel of oil equivalent (“BOE”) are predicted to continue falling over the next two quarters (the metric fell in the prior six quarters) before rising an estimated 2.5% in Q3 2014.

Analysts of publicly traded metals and mining companies are predicting sharp price increases for platinum and palladium over the next four years, which contrasts with stagnant medium-term price projections for copper, gold and silver. Zinc, nickel, lead and aluminum are also predicted to gain value in each of the forward four years.

Coffee and lean hogs have made significant gains over three months (60% and 49%, respectively), but the two commodities diverged in March. Most of coffee’s gain was in February (+44%, with the commodity is down 2% in March), while the price gains for lean hogs have accelerated over the year (11% in January, 13% in February and 19% in March). On the other end of the spectrum, lumber prices have fallen 7% over a three month period.