Energy Commodities Price Outlook Economic Forecast

Energy Commodities Price Outlook

Prices to firm up due to OPEC’s agreement

In early 2016, energy prices fell sharply, led mainly by plummeting crude oil prices but they recovered over the course of the year and ended 2016 on a good note. Prices increased 21.5% from the same period of the previous year in Q4 2016 and are expected to continue rising solidly through 2017. Energy prices should take the year-on-year gain to 15.8% in Q4 2017, reflecting a broad-based improvement. Crude oil prices, which have risen substantially following the news of OPEC’s formal agreement to cut production, will lead the improvement in energy prices and are projected to average USD 55.0 per barrel in the Q2 2017 and to approach the USD 60.0 per barrel mark in Q4 2017.

With OPEC’s production cut agreement, most analysts see the market being pushed into deficit in H1 2017, which should, in turn, accelerate the declines in inventories and push prices up. That said, the outlook for crude oil prices in particular, and for energy prices in general, rests heavily on compliance with the agreed production targets. Moreover, further downside risks could come from faster recoveries in Libyan and Nigerian oil production, which are exempt from the agreement. Another factor at play is a resurgence in U.S. shale oil production, which, once prices rise more rapidly and are sustained, could dampen the price recovery this year.

The impact the new Trump administration will have on oil markets remains unclear. On balance, prospects for the U.S. economy are positive and global growth is expected to pick up this year. However, the Trump presidency does present downside risks to many emerging economies, which are also key drivers of oil demand. Another crucial issue is Trump’s pledge to rip up the nuclear deal with Iran. It is still unclear whether Trump wants to pursue dismantling the accord, or if he wants to do so at all, as it has been incorporated into international law by the U.N. Security Council. But there is a chance that U.S. sanctions could be re-imposed, which could curb Iranian exports and add upward pressure on prices. A bill to that effect is now headed for the Senate and the president’s office. If approved, it would facilitate the swift activation of sanctions currently not in force under the nuclear agreement.

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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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