In the energy market, trade policy is almost unavoidable. With the Far East, things are moving forward in terms of trade policy. The same cannot be said of the relationship between Europe and the US. According to OPEC, significant investment in new oil and gas resources is needed to meet long-term demand. This is in stark contrast to the energy transition that various countries are pursuing in one way or another.
US President Trump announced a trade agreement with Japan and the Philippines. True to form, Trump calls the deal with Japan "perhaps the best deal ever." According to some sources, talks are underway with China about extending the mutual pause in the tariff war. Whether this heralds progress in negotiations with the EU remains to be seen. Europe appears unwilling to accept Trump's every offer. Several sources report that a package is being developed that includes a 30% tariff on US products should an agreement with Trump fail.
Oil market players are struggling to make sense of trade policy, and indirectly, economic growth expectations. The price of Brent crude remains more or less stable at just below $70 per barrel.
The diesel price also hasn't shown any major fluctuations. On Wednesday, it was €125,04 per 100 liters.
Oil's role in the energy supply is far from over. That's what OPEC predicts, an organization that naturally isn't entirely neutral on the matter. According to the cartel of oil-producing countries, oil demand will rise to 123 million barrels per day by 2050. To continue supplying that oil, up to $2050 trillion would need to be invested in new oil and gas resources by 18,2. OPEC is assuming a very different scenario than the International Energy Agency (IEA), which expects oil production to peak before 2030. Countries like China and India are pursuing a fairly clear course toward greater energy independence in this regard and are therefore less inclined to favor oil. Experts like to cite the electric car as an example. However, electric alternatives are not yet available for all applications. Consider agricultural machinery, for example.
Green or not?
Opinions on how to generate that electricity also differ considerably. Solar and wind have long been promoted, but it's becoming clear that maintaining a stable grid with them is very difficult. Nuclear energy is a more logical carbon-neutral alternative in that regard, but that also comes with the disadvantage of nuclear waste. It's no wonder that several experts predict that coal and gas are far from finished in power generation.
Electricity prices on the Epex Day-ahead schedule have been relatively stable over the past week. However, intraday fluctuations are still significant. In the afternoon, when the sun is shining, the price can easily be €100 lower than at peak times in the early morning or early evening.
Gas on the TTF is showing a downward trend. This is partly due to the EU, which is loosening the reins somewhat on the pace at which gas supplies must be replenished. Storage facilities are approximately 65% full, compared to 83% this week last year. Due to a stable, substantial supply of LNG, the European Parliament is giving member states some more leeway. The fact that less gas is coming from Norway due to maintenance work on the Troll gas field has only a limited effect on the TTF.