Aurora’s Global Energy Markets Forecast presents Aurora’s outlook to 2040 for global energy markets, including oil and coal price forecasts and gas price forecasts for NW Europe, US and Japan and substantial commentary on market and policy movements over the previous quarter.
Key highlights include:
- Oil prices are 0.9%, or $0.6 per barrel higher than our July 2018 forecast over the period 2018-2025, driven primarily by a tighter oil market in the near term as Iranian oil export sanctions have approached.
- Relative to our July 2018 forecast, our gas price outlook over the period 2018-2025 has increased by an average of 1.0%, or $0.1/MMBtu for NW European prices, and by an average of 0.4%, or $0.04/MMBtu for Japanese prices. Our outlook for US prices has remained relatively unchanged.
- Rising EU ETS futures prices (which increased demand for gas futures by power plants) and increased injection into European storages since last quarter, coincided with an anticipated rise in Chinese residential heating demand this winter, to drive the increase in European and Asian prices.
- Compared to our July 2018 forecast, coal prices are higher by an average of 1.0%, or $0.7 per tonne between 2018-2025. The price rise is due to increased Chinese coal consumption in the power sector and constraints in exports of coal from Indonesia, both of which combined to raise spot and futures prices since July.