Buckle up, the oil markets are in for a bumpy ride. That is the message from the US Energy Agency (EIA) in its latest monthly oil market report. Trump’s trade policy is making the oil market very difficult to predict. The trade war is also echoing on the gas market. It has driven China into the arms of Russia for importing LNG. The expectation is that more American LNG could end up in Europe as a result.
After a sharp decline since ‘Liberation Day’ on April 2, when Trump announced massive import tariffs, the oil price has been fairly stable in recent days. At the time of writing (Wednesday afternoon, April 16), the Brent benchmark is $65,80 per barrel. That is higher than last week on Thursday, April 10, when Brent crude cost $63,33 per barrel. However, a full recovery of the oil price is highly unlikely under the current circumstances (unless something unexpected happens).
The US Energy Agency (EIA) has significantly lowered its demand forecast in its April oil market report released on Tuesday, by 300.000 barrels per day in 2025 to 730.000 barrels per day. In 2026, demand is expected to decline further to 690.000 barrels per day. The agency is doing this because of trade tensions that are negatively affecting the economic outlook.
The 'drill baby drill' Trump’s policy of giving fossil fuels free rein is being jeopardized by his own policies, as the oil market report shows. According to the EIA, oil prices must average $65 for U.S. companies to make it profitable to drill new oil wells. New drilling is also discouraged by import duties that make steel and equipment more expensive. “Together with the impact of Chinese tariffs on U.S. ethane and LPG imports, this has led to a 150.000 barrel per day downward revision to our U.S. oil production forecast for this year, with growth now estimated at 490.000 per day,” the report said.
It’s tough to really predict the market amid all the tariff frenzy. “There are expected to be tough trade negotiations during the 90-day tariff reprieve, and potentially beyond. Oil markets are in for a bumpy ride, and there are significant uncertainties surrounding our forecasts for this year and next.”
Diesel
The price of diesel has fallen further, from €119,53 per 100 litres (from 4.000 litres) a week ago to €117,53 on 16 April.
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Gas
Trump's trade tariffs, as well as peace talks to end the war between Russia and Ukraine, have pushed gas prices down in recent weeks. China has now sought rapprochement with Russia for LNG imports. Due to the trade war between the US and China, it is possible that more American LNG will come to Europe. This expectation also puts pressure on the price. On the other hand, demand in Europe will also increase again in the coming period. Gas supplies are currently low and need to be filled again. The Dutch filling rate (23%) is even lower than the European one (36%). On April 16, gas on the TTF was again slightly more expensive at €34,95 than on Thursday April 10 (€33,29).
Electricity
Electricity prices fluctuated quite a bit last week. On Monday 14 April, the daily average on the Epex Spot Day Ahead was €93,37 per MWh, while the day before it was €38,82. The hourly and daily prices are highly dependent on the amount of solar and wind energy generated.
A new report from the UN World Meteorological Organization shows that the share of renewable energy sources in Europe’s electricity generation will reach a record high of 2024% in 45, breaking the previous record of 2023% set in 43. Of that 45% renewable energy share, around 18 percentage points came from wind, 9 percentage points from solar and 18% from hydro. Wind and solar together peaked in April, accounting for almost a third of total electricity generation.