Energy Commodities Price Outlook Economic Forecast

Energy Commodities Price Outlook

OPEC cuts lift prices, but inventories remain high

The outlook for energy prices is positive. Forecasters project energy prices to increase 11.8% year-on-year in Q4 2017, reflecting higher prices for crude oil and its distillates—gasoline and gasoil. Henry Hub natural gas is also expected to have a brighter year, compared to 2016. Moreover, coal prices—both thermal and coking coal—will extend last year’s gains through this year, but are seen losing impetus in the final quarter. Meanwhile, forecasts for uranium suggest that its price will perform erratically this year.

The rebalancing of the crude oil market remains on track, with production constraints and robust demand likely to accelerate in the coming months. OPEC cuts remain ahead of schedule and demand has been better than expected in Q1. The only negative surprise has been U.S. drilling activity in response to higher prices, which has started to feed into higher output. Consequently, concerns persist that crude oil inventories in the U.S. will remain excessively high, raising questions about whether OPEC cuts will be enough for a quick rebalancing of the oil market. Thus far, OPEC and non-OPEC producers have been cutting output aggressively in an effort to reduce the overhang of global inventories that have built up over the past two years. In many instances, producers have cut more than required, meaning their combined progress is well on track. However, the market is becoming increasingly impatient with the rebalancing, adding further pressure on OPEC to extend the cuts to the second half of the year. The cartel’s next meeting is in May and the market is expecting OPEC members to announce the extension of the cuts at that stage. In general, there is still upbeat sentiment that, even if U.S. shale production rises, OPEC’s output reduction will bring inventories back down to sustainable long-term levels. As such, crude oil prices are projected to range between USD 55–60 per barrel in the final quarter of 2017. 

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Energy Commodities Historical Price Data

2012  2013  2014  2015  2016  
Brent Crude Oil111.67  108.69  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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