Business Renewals

2019 Oil Price Review

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As the New Year was brought in with a bang it is worth checking on how wholesale oil prices moved inline with some of the market expert forecasts.  We have complied a list of some of the large fund managers and industry experts to see how their predictions matched up with market reality.

For reference there are two main indices for Oil, these being the West Texas Intermediate (WTI) which comes from the United States and is the benchmark for U.S. oil prices.  Brent Crude Oil Futures comes from Northwest Europe and is the benchmark for global oil prices.  For the purposes of this we have used Brent.

1st January Brent Crude Oil Futures – $59 / barrel

  • World Bank – Predicted an average cost per barrel in 2019 of $67
  • Citi Bank – Predicted an average cost per barrel in 2019 of $60
  • Bank of America – Predicted an average cost per barrel in 2019 of $70
  • EIA – Predicted an average cost per barrel in 2019 of $61
  • RBC Capital Markets – Predicted oil prices could top $80
  • Iran – Predicted oil prices could top $100
  • Eurasia Group – Predicted oil prices over $100 and possibly $150 if tensions with Iran increased significantly

So what was the actual average for 2019….

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Business Renewals

Wholesale Energy December 2019

Eon renewable energy

The end of the year saw forward price curves prices for power fell to the lowest levels seen since 2018 due to a combination of mild weather, falling gas and EU carbon prices.  The signing of a new Russia - Ukraine gas transportation agreement also put pressure on electricity prices.

Record LNG imports and mild weather helped to keep day ahead prices around 30p/therm.  December saw the UK receive 29 deliveries totalling around 2.8bcm.  Prices could have fallen further if it was not for higher than normal continental storage utilisation, this being primarily driven by the transition in Russian gas through the Turk pipeline.

Given that the election has been finalised and many aspects of Brexit decided it is hoped that the value of the £ will help keep UK prices low into Q1 of 2020.