Brent: Expected to fall in 2015
In 2014, the Brent price stood at $99/b, down by nearly $10/b compared to 2013 ($108.6). Of course, the major event of the year was the Brent’s plunge from $112/b in June to $62/b in December. The trend continued in January 2015: the Brent lost another $10 and reached $45/b. The reason for this downswing, over and above flagging economic growth and the dollar’s progression since June (-12% for the euro, worth $1.18 in January), is OPEC’s decision on November 27 to abandon the role of swing producer. OPEC aims to get producers of non-OPEC oil, LTO and high-cost unconventional oil to slow their increase in output to avoid a steady erosion of OPEC’s market share.
NBP: The uptrend continues
The NBP price stood at €23.7/MWh ($8.7/MBtu) in November, an increase of 8.7% in one month. This level is nearly 15% lower than that of November 2013. The uptrend has been favored by a seasonal increase in demand (even if only relative) and the decreases in Norwegian deliveries (incident at the Troll gas field).
The 2014 edition of CEDIGAZ’s flagship survey Natural Gas in the World highlights some disturbing signs of weakness on the demand and supply sides, indicating structural challenges that will need to be addressed before a golden age of gas can occur.
In 2013, growth in worldwide gas demand decelerated, up by only 1% versus 2.4% in 2012. This is less than the 3% growth achieved by coal and, most remarkably, less than that of oil (1.4%). Moreover, gas was the only fossil fuel to record lower growth in 2013 than in 2012. This phenomenon may be observed even in Asia – a powerhouse in terms of growth in gas demand – where demand rose 4% in 2013, down from 6% one year earlier. Gas demand had already shown its limitations in 2012, when it gained only 2.4%, compared to an average growth of 2.8% per year in the previous decade.