The oil price has fallen (well) below $60 per barrel, reaching its lowest level since early February 2021. This is despite geopolitical tensions between the US and Venezuela and the restrictions on the South American country's oil exports. New figures from China and hopes for peace between Russia and Ukraine are pushing the oil price down.
At the time of writing, Brent crude oil is trading at $58,84 a barrel.
One of the driving forces is the latest figures on the Chinese economy. Growth in Chinese industrial production has slowed. Production rose 4,8% year-on-year in November, the slowest pace in fifteen months. Retail sales grew 1,3%, the weakest growth since December 2022. Meanwhile, the OPEC+ countries have increased oil production this year. However, they announced they will pause production in the first three months of the new year.
Optimism about a peace deal between Russia and Ukraine is also putting pressure on oil prices. According to Donald Trump, a ceasefire is closer than ever. When sanctions on Russia are lifted, Russian oil will be released back onto the market.
There is also bullish News. Since the US seized a Venezuelan oil tanker last Wednesday, the South American country's oil exports have plummeted, Reuters has found, citing shipping data and sources. Only the US oil company Chevron has entered international waters with Venezuelan oil, the news agency reports. According to the Venezuelan state oil company PdVSA, it was the victim of a cyberattack on Monday.
Diesel price
The price of diesel also fell further from €123,72 per 100 liters from 4.000 liters on December 10 to €121,73 per 100 liters on December 16.
gas price
The gas price on the TTF is currently €26,90. This isn't as low as last week, when the lowest price of the year was €26,65 per MWh, but it's still relatively low. A year ago, the price was €40,15 per MWh on December 16th.
The low gas price is also the reason why European gas reserves are not so well-filled this year. The Dutch gas supply has also been significantly depleted. According to data from Gas Infrastructure Europe, it is currently 58% full. For Europe as a whole, that's almost 70%. According to the National Energy Dashboard's energy forecast, gas demand this week is on average roughly comparable to last week. Only on weekends is there significantly more demand for gas.
Electricity price
The average daily electricity price varied last week on the European Power Exchange (Epex Spot) from €75,27 per MWh on Wednesday, December 10, to 106,19 per MWh on December 12.
Wind farm revenues vastly overestimated
Governments in Europe and the US often vastly overestimate the yield of wind farms, generating up to 50% more wind energy than is actually generated. This is evident from a publication by, among others, a senior lecturer in Wind Energy at Delft University of Technology. The researchers have developed a model with crucial trade-offs between turbine height, specific power, and wind farm density. As wind farms become larger and denser, they generate less wind energy. Based on the research, NRC reports that the Dutch target of 30 gigawatts of wind energy in the North Sea will only be utilized at 35% because the turbines block each other's wind.