Global Oil prices are now over 40% lower than in the summer.
But what will happen next and will prices increase any time soon?
By now you can't have avoided hearing about the massive shift in global energy prices in
But why have most of our energy bills remained relatively
static while the global energy markets tumble, and what way will future
The future for energy prices is anyone's guess. As a
global recession looms, and growth falters, so do energy prices.
The price drop can only last as long as there are plentiful supplies
(and supply development) and a global pick up in economic activity seems
far away. Both these seem unlikely.
The world needs more energy. There are still literally
billions of people on the planet without a secure, affordable supply of
energy. Recessions and stagnations rarely last too
In the short term, it is likely energy prices will become
very volatile, bouncing around as news emerges on possible
increases/decreases in economic activity and threats/gains to supply.
The US shale energy revolutions will likely be a bit loser in the
short term as the extra cost of extracting these fuels will make them
less competitive against overseas imports which have a much lower cost
In conclusion, it is likely that energy prices will pick up
(the timing is less clear). The speed of the pick up will probably
depend more of global economic growth rates and what rates are expected
in the future.