The NBP fell from €22/MWh ($7/MBtu) in March 2015 to €14.5/MWh ($4.6/MBtu) in January 2016, which represents a decline of 35%. This decrease is consistent with the general trend in energy prices over the same period: coal was down by 25%, oil by 45% and the average price of Japanese LNG by 35%.
The NBP stood at about €13.2/MWh ($4.2/MBtu) at the beginning of February and is expected to keep sliding. The futures markets anticipate a price of €12.2-12.4/MWh ($4.0-4.1/MBtu) for next summer. These forecasts are in line not only with the decrease in the average six-month oil price, which will also hit bottom next summer, but also with expected coal price trends. The average NBP for 2016 is now pegged at €13.2/MWh ($4.3/MBtu), i.e. 34% lower than in 2015.
European LNG net imports grew by 16.6% in 2015
In 2015, LNG net imports grew by 16.6% in Europe as demand for natural gas grew in the region. As a consequence of more deliveries (+1.8 Mt) and less reloads (-2.68 Mt), net imports increased by 4.47 Mt up to 31.35 Mt. Except in France, where gross imports decreased from 5.07 Mt to 4.77 Mt while re-expors slightly decreased (-0.03 Mt), and in Greece, where imports were flat at around 0.45 Mt, net imports increased everywhere because of various factors.
Brent : $40-60/b in 2016 (2015: $52/b)
The Brent averaged $52/b in 2015, down 47% compared to 2014 ($99/b). The very disturbed geopolitical context had little impact on prices, apart from concerns arising early in the year after Saudi Arabia and its allies intervened militarily in Yemen, starting on March 26. All in all, excess supply defined the price which, after August, stayed below $50 and fell to $38 in December. Downward price pressures were due to the continued OPEC policy in favor of defending market share and the fact that U.S. production only registered a small decrease. Price forecasts for 2016, based on the futures markets, have been in the $40-60/b range since August 2015. Prices will be influenced by the following key factors:1/ the actual rate of economic growth, potentially “disappointing and uneven” according to the IMF; 2/ Iranian exports, likely to rise by at least 0.5 Mb/d; 3/ how far U.S. production falls as a result of reduced drilling activity; 4/ the effects of the decrease in upstream investment; 5/ whether OPEC policy – unchanged since year-end 2014 – changes or not; 6/ the influence on production of growing regional tensions in the Middle East. Looking at the supply-demand balance alone, the market could start to rebalance at the end of 2016, which could gradually put pressure on prices.
Prices for 2016 mainly reflect changes in forward prices and can not be considered as forecasts. Economic, climatic or geopolitical context may in particular greatly impact future trends.