Our Energy Economist, Dominic Whittome, shares his Energy Highlights Report on oil, natural gas, and electricity prices in 2024. Delving into the dynamics of Crude Oil, petrodollar, Natural Gas, and Electricity, this marks the commencement of a comprehensive four-part blog series.
Geopolitical Tensions and OPEC+ Strategies Shape Market Trends
Oil prices rose steadily this year. The spot market eclipsed $90/bbl on 5th April following the agreement between Russia and Saudi Arabia to extend production cuts announced last year well into 2025. The market was further unsettled by missile attacks on Red Sea shipping and Russian refineries. Oil prices drifted back below $78/bbl in the first week of June, only to rebound sharply that same week to close above $86/bbl as hopes of a ceasefire in both regions were dashed again.
In terms of export policy, Russia, among certain other OPEC+ producers, may well have a nefarious interest in fanning the flames of inflation in Western economies despite short-term revenue needs. Meanwhile, the cartel’s swing producer, Saudi Arabia, is in a difficult position with troubles in Gaza cascading across the Middle East, so ministers will be wary of increasing output lest it be perceived to be ‘siding with the West’. The market is up just 4% this year, but any significant rises from now on will probably go unchecked. The kingdom’s predicament naturally plays into the hands of genuine ‘hawks’ within the OPEC+ with all sorts of ways to drive oil into three figures, even if we’ve yet to see any evidence of that as things stand.
Dominic Whittome
Dominic Whittome is a energy consultant with a background in economics and econometrics. He has 28 years of experience in the industry principally in the supply, trading and corporate finance spheres. Serving as analyst, commercial manager and head of trading within EDF Energy, ENI UK and Mobil North Sea before he joined Prospect Law and has since specialised in energy purchasing; contract arbitration and commercial development of infrastructural and renewable power projects.
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