Energy Commodities Price Outlook Economic Forecast

Energy Commodities Price Outlook

Living on a prayer

In Q3, energy prices hit a soft patch, but they are projected to increase towards the end of the year. The recovery will mainly be driven by winter-related demand, tighter energy markets and prospects of an agreement to freeze oil production by major producers. Although a potential agreement to cap oil output is welcome news, it is not likely to have a major impact on prices, given the current production levels.

Oil prices rallied at the end of Q3 and beginning of Q4 after OPEC surprised the markets by announcing the outline of a deal to freeze output at between 32.5 and 33.0 million barrels a day. OPEC’s message was clear: freezing production levels is necessary for stock draws to accelerate and prices to trend higher. However, many analysts and market participants remain skeptical that OPEC members will finalize the agreement since they face significant challenges ahead of the 30 November meeting when the details are to be thrashed out. Brinkmanship between Saudi Arabia and Iran had thwarted previous such attempts, and the level at which Iran will agree to cap production remains a sore point. Figuring out the baseline from which each OPEC member will reduce output will be equally challenging. OPEC members have bought themselves two months to deliver a real deal and they are fully aware of the cost of failure. Securing a deal in November would support market sentiment, but it would come too late to tighten the market in Q4 16. In that case, oil producers would not start to reap the benefits of higher prices until next year.

There are legitimate reasons to remain skeptical about the agreement, but it certainly means that OPEC has opened a new chapter in its long history. Analysts surveyed by FocusEconomics expect energy commodities prices to increase 20.6% year-on-year in Q4 2016, which has been revised up from the 19.6% increase they forecast last month.

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Energy Commodities Historical Price Data

2011  2012  2013  2014  2015  
Brent Crude Oil111.4  111.67  108.69  98.9  52.42  
WTI Crude Oil94.9  94.08  97.97  93.02  48.68  
Gasoline2.9  3.04  2.92  2.66  1.94  
Natural Gas3.99  2.76  3.73  4.34  2.61  
Thermal Coal121.86  98.17  85.83  72.54  60.38  
Coking Coal 296.67  252.1  209.72  158.35  121.38  
Uranium57.02  48.86  38.66  33.44  36.81  
Gasoil930.8  953.38  918.88  837.79  488.16  
Ethanol2.73  2.37  2.51  2.39  1.6  

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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