ZEW Energy Market Barometer: Energy Prices Continue to Increase – Short-Term Relaxation in Oil Price

During the past months, the oil price reached new weekly record highs. For the coming six months, the situation in the crude oil market is going to stabilise, while a further price increase in natural gas is expected. This is the opinion of the majority of the 200 energy market experts surveyed by the Centre for European Economic Research (ZEW). Every six months, the ZEW-survey reveals their assessment of the situation in the energy markets. On a five years time horizon, the survey participants expect further increasing prices, especially of natural gas and electricity, as well as coal and oil.

Around 42 per cent of the experts surveyed by ZEW are convinced that the oil price will stabilise during the coming six months. 15 per cent expect the oil price to drop while 43 per cent believe that it will increase further. Even though the soaring oil price will come to a halt, according to the majority of experts, the future price development remains a much discussed topic.

More unanimity among the survey participants can be observed when it comes to assessing the short-term development of gas prices. Around 75 per cent expect gas prices to rise within the coming six months. Some 24 per cent of the survey participants expect prices to remain stable, while only around one per cent expects a fall in gas prices during the next six months. For the first time in the history of the ZEW Energy Market Barometer, experts have shown such a strong degree of unanimity regarding the expected rise in the gas price.

Only a slight majority of 53 per cent forecasts stagnating coal prices for the coming six months. Around 43 per cent expect a short-term price increase. A little more than four per cent expect a fall in coal prices. Compared to the previous ZEW Energy Market Barometer surveys, a considerably growing number of experts expect short-term increases in coal prices. According to the survey participants, electricity prices will not fall during the next six months either. Some 59 per cent think that electricity prices will rise; about 40 per cent expect prices to remain at present level, while only one per cent expects a fall in prices

A significant majority of over 70 per cent assumes a price growth for energy sources on a five years time horizon. Some 73 per cent are convinced that coal prices will rise (21 per cent expect a stagnation of prices and around six per cent a price drop), 75 per cent expect price increases for crude oil (according to 15 per cent of the experts prices will stagnate and according to ten per cent prices will fall), and around 81 per cent of the survey participants expect further price increases for natural gas (twelve per cent forecast a price stagnation and only seven per cent a fall in gas prices).

In accordance with these developments, the energy market experts believe prices for electricity to rise as well. A vast majority of 86 per cent expect a price growth in the electricity market. Only around ten per cent expect prices to remain at present level during the coming five years and only four per cent forecast lower prices.

The ZEW Energiemarktbarometer (Energy Market Barometer)

The ZEW Energiemarktbarometer (Energy Market Barometer) is an industry-specific indicator of economic sentiment, based on a semi-annual survey of the energy supply, trade, and services industries, as well as regional suppliers in Germany. It comprises the expectations of more than 200 experts concerning short (six months) and long-term (five years) developments in the national and international energy markets.

Contact

Dr. Ulf Moslener, E-mail: moslener@zew.de