Energy Commodities Price Outlook Economic Forecast

Energy Commodities Price Outlook

Strong fundamentals continue driving prices up in January, but some warning signs have started to emerge

The global oil market is rapidly rebalancing, and analysts consider that the global oil glut has finally disappeared. Strong compliance with the oil-cap deal by OPEC and non-OPEC participants; collapsing production in some countries, chiefly Venezuela; and maintenance efforts are limiting global supply. Moreover, global growth remains strong and will likely remain on a solid footing throughout this year as emerging-market economies start compensating for slowing growth in advanced economies. That said, the latest data suggests that U.S. shale oil producers are quickly ramping up production, threatening to jeopardize the efforts of the oil-cap deal participants. Moreover, U.S. stock markets slumped in early February amid concerns about rising interest rates in the country and a firmer U.S. dollar, negatively reverberating across most energy price markets.

While the increase in prices for both Brent and WTI crude oils dominated headlines last month, prices increased the most for gasoline and natural gas in January. Higher oil prices have been behind the rise in gasoline prices. Moreover, gasoline prices are benefiting from the surge in U.S. gasoline exports, particularly to Latin America, and a buoyant labor market in the U.S. Prices for natural gas climbed in recent weeks in the wake of a cold winter in Europe and North America, which pushed up demand for heating. Energy prices rose 6.9% month-on-month in January (December: +3.3% mom).

The upward trend in energy prices is expected to continue going forward, albeit at a much weaker pace, as oil supply will remain elevated this year due to rising production in the United States. Moreover, the oil-cut deal expires at the end of December 2018. If not extended, it will certainty imply more oil into the markets by participants in 2019. Tighter environmental regulation in China and a broader preference for cleaner energy will put a dent in demand for thermal coal, while coking coal prices will decline because of slower demand for steel. Analysts surveyed by Met the why particular expect energy commodities prices to rise 2.2% year-on-year in Q4 2018. They see an annual expansion of 1.2% in Q4 2019.

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Energy Commodities Historical Price Data

2012  2013  2014  2015  2016  
Brent Crude Oil111.67  118.69  98.9  52.42  43.83  
WTI Crude Oil94.08  97.97  93.02  48.68  43.28  
Gasoline3.04  2.92  2.66  1.94  1.44  
Natural Gas2.76  3.73  4.34  2.61  2.49  
Thermal Coal98.17  85.83  72.54  60.38  63.03  
Coking Coal 252.1  147.28  116.6  90  120.59  
Uranium48.86  38.66  33.44  36.81  26.45  
Gasoil953.38  918.88  837.79  488.16  390.61  
Ethanol2.37  2.51  2.39  1.6  1.59  

Note:
Brent Crude Oil prices in USD per barrel (bbl).
WTI Crude Oil prices in USD per barrel (bbl).
Gasoline prices in USD per gallon (gal).
Natural Gas prices in USD per Million of British Thermal Units (MMBtu).
Thermal Coal prices in USD per metric ton (mt).
Coking Coal prices in USD per metric ton (mt).
Uranium prices in USD per pound (lb).
Gasoil prices in USD per metric ton (mt).
Ethanol prices in USD per metric ton (mt).
All prices are average of period (aop).

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Price forecasts and historical data for Energy, Metals and Agricultural Commodities

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