Energy Commodities Price Outlook Economic Forecast

Energy Commodities Price Outlook

OPEC and Russia oil cut deal will shore up crude prices

Energy prices continued to rally in November on the back of the expected extension of the OPEC oil cut deal and strong demand for key commodities. Energy prices expanded 7.2% month-on-month in November, marking the largest increase so far this year. On 30 November, OPEC members and Russia decided to extend the oil output cut of 1.8 million barrels per day (mbpd) by an additional nine months to the end of 2018. Although the announcement was largely expected by market participants, statements by Russia calling into question the extension had initially cast some doubts about the success of the deal.

With this agreement, the supply of oil will remain tight next year, paving the way for the oil market to rebalance following years of deficit. Furthermore, U.S. natural gas prices increased in November, buttressed by higher demand for heating as the winter season approaches in the Northern Hemisphere. Although the market remains oversupplied, uranium prices increased in November due to the closure of some mines to revive a commodity that entered a bear market when Japan closed its nuclear reactors in the wake of the Fukushima disaster in 2011.

Despite the current sweet spot in the energy market, there are reasons to remain skeptical about future developments. While higher oil prices will allow shale companies to ramp up production, participants in the oil deal will be tempted to deviate from quotas to improve their battered finances, potentially limiting any upswing in crude prices. Moreover, increased supplies of coking and thermal coal, coupled with reduced demand from China, will cloud the outlook for coal. As a result, analysts surveyed by Met the why particular expect energy commodities prices to decline 3.0% year-on-year in Q4 2018.

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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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