Energy at bigger risk from winter weather than agriculture – Goldman Sachs

By FXStreet FXStreet (Delhi) – Research Team at Goldman Sachs, notes that the 2015 fall has seen some significant weather deviations: Europe and the US have been much warmer than average over November-December while weather has been hot and dry across Asia over the last few months.

Key Quotes

“El Niño is key but there are other weather oscillations at play

The majority of these weather deviations are due to El Niño conditions, with the current episode forecast to be the 3rd strongest since 1950, just shy of the 1982/83 and 1997/98 winters. However, El Niño conditions don’t explain the warm European winter which is due to other oscillations also in a strong positive (warm) phase: the Arctic Oscillation (AO, related to the polar vortex) and the North Atlantic Oscillation (NAO, related to Atlantic pressure differentials and the Jetstream). While these warming oscillations are only forecast to last until the end of 2015, El Niño conditions are forecast to last until spring or early summer 2016.

Large and certain effects for cocoa, wheat, palm oil & beans

The impact an El Niño has on commodities is uncertain, not least because every El Niño has subtle but important variations. By focusing on regions which are both critical for …read more

Source:: FX Street