How will energy commodities perform this year?
As the second quarter of 2016 begins and those of us located in the northern hemisphere move out of winter and into spring, a sense of hope starts to creep in as the days become longer and lighter after months of darkness and cold. However, unfortunately for many, the low-commodity-price environment does not seem to be changing much with the seasons. Energy commodities, in particular, are continuing to see low-prices, which is why we have created a new infographic depicting our latest price forecasts for Brent Crude Oil, WTI Crude Oil, Thermal Coal, and Natural Gas, which are available in our FocusEconomics Consensus Forecast Commodities report along with price forecasts and analysis on 29 other commodities in the energy, agricultural and metals sectors.
Click the button to embed & share
Click the infographic to open a full-sized version
Latest News on Energy Commodities
As mentioned previously, the low-commodity-price environment marches on, much to the dismay of many commodity-based economies.
In oil news, at a meeting in Doha on 17 April, some of the world’s most important oil exporting nations, including key-members of OPEC and Russia, met to iron out a deal to freeze oil output at January levels in an attempt to stabilize oil prices. In February, the announcement of the potential deal was made public, and two months later, it was believed that an agreement between the top oil exporting nations was a done deal, however, at the meeting in Doha the deal unexpectedly fell through. Negotiations will now have to be tabled until the next OPEC meeting in June, which means low oil prices may continue as the global oil supply glut rages on.
After falling to record-lows in February, Brent Crude Oil and WTI Crude Oil, two of the world’s major trading classifications of crude oil, began to recover as the widely-held belief was that the deal on the table at the Doha Summit was a sure thing, however, as already mentioned, that deal didn’t happen. At the beginning of April, oil prices returned to above USD 40.0 per barrel and, on 15 April, Brent Crude Oil prices traded at USD 41.3 per barrel, which was 10.9% higher than on the same day in March. The price was up 13.3% on a year-to-date basis, while it was 30.1% lower than on the same day last year. WTI Crude Oil traded at USD 40.4 per barrel, which was 11.2% higher than on the same day of the previous month. The price was up 8.8% on a year-to-date basis, but was 28.2% lower than on the same day last year. However, after the announcement that the deal in Doha was a no-go, prices for both dropped again.
Australian commodities and Chinese demand for those commodities is a match made in heaven. China’s booming economy and appetite for coal to run that massive economy has been insatiable in the past. However, things have changed. The Australia Thermal Coal price, which is the major benchmark for coal prices in Asia, fell to its lowest level in almost a decade at the end of last year and things have not gotten much better since then. A move to “green” cleaner energy sources, even in China, has driven down demand for coal. Chinese power plants, which normally run on coal, have turned to natural gas, a cleaner energy source, leaving coal out in the cold. As is the case with oil, an excess in supply of coal as well as reduced demand have put downward pressure on coal prices. On 15 April, the spot price for Australian Thermal Coal was USD 50.6 per metric ton. The price was stable compared to the same day in March and was 3.2% lower on a year-to-date basis. The price was down 21.3% from the same day last year.
One of the cleaner fossil fuels, Natural Gas is also facing a tough time of late, despite being opted for as a greener form of energy. The heating fuel did not do too well at the beginning of this year as a warmer-than-expected winter period reduced demand, pushing prices down. After hitting rock bottom on 4 March, prices began to pick back up slightly as statistics revealed that an increase in sales of natural-gas-powered vehicles occurred in the month of February, which indicated a possible rise in demand for natural gas in the future. However, prices began to retreat again in mid-march as natural gas data from the EIA showed that production in 2015 was at a record-high. On 15 April, the Henry Hub Natural Gas price closed the trading day at USD 1.72 per one million British thermal units (MMBtu). This price was down 3.4% from the same day last month. The price was 25.5% lower on a year-to-date basis and was down 33.3% from the corresponding date in 2015.
Where is it all going from here?
Good question. Substantial uncertainty still surrounds energy commodities. Excess supply of energy commodities coupled with low demand will likely keep energy commodity prices low. The breakdown in negotiations in Doha to freeze oil-production, a deal which was thought to be a slam dunk before the meetings, will now likely result in oil prices remaining low. Nonetheless, our analysts are generally optimistic about oil prices rising throughout this year as there is evidence that higher-cost oil producers are dropping out of the market while geopolitical tensions in the Middle East may lower regional production. Looking forward, though, as the world moves toward cleaner more sustainable energy sources, the end of the era of fossil fuel energy may be closer than it appears.
FREE Sample - Commodities Report
Download a sample of our new Consensus Forecast Commodities report
33 commodities in the energy, metals & agricultural sectors
Price forecasts, historical data, & written analysis
What is the difference between WTI & Brent Crude Oil?
Date: April 21, 2016
TagsJapan Unemployment rate European Union India IMF OPEC USA Agricultural Commodities Turkey Portugal Oil Mexico Infographic Venezuela Fed G7 South Africa Housing Market Euro Area oil prices Latin America Investment Latin America Euro Area NAFTA Company News Spain Base Metals Commodities precious metals Gold Precious Metals Commodities Trade Forex Tunisia Russia UK Banking Sector Asia Sub-Saharan Africa Colombia Industrial Metals Commodities Economic Growth (GDP) China Iran Commodities Exchange Rate Inflation Ukraine Brazil Australia Emerging Markets Vietnam Energy Commodities Brexit Germany United Kingdom Panelists Canada Nordic Economies NAFTA Eastern Europe France Consensus Forecast Africa Italy Argentina Greece Major Economies MENA
37 minutes ago
1 hour ago
Analysts Russia’s election having limited economic implications this year https://t.co/UbnLH3Ijir
17 hours ago
18 hours ago
Weaker investment dynamics are causing economic growth to slow in Israel: https://t.co/NqG81idLwy
19 hours ago
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- What will be the most miserable economies in 2018?
- The World's Top 10 Largest Economies
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- Gold: The Most Precious of Metals (Part 3)
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- FocusEconomics Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 100-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- 2017 & 2018 Economic Outlook for the Top Oil Producing Countries
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Russian economy update in wake of OPEC deal announcement
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- The Wisdom of the Crowds and the Consensus Forecast
- There's no end in sight to the Venezuela crisis
- Can the peso predict the U.S. election results?
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- FocusEconomics partners with leading online statistics provider Statista
- China: Recent postive economic data may be papering over the cracks
- Sub-Saharan Africa's 2016 & 2017 growth rates
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit