Energy markets are in constant flux with sometimes sharp and abrupt spikes occurring while simultaneous long-term trends are evolving on an underlying plane. The nature of these markets makes it imperative to stay abreast of energy news and to understand the multi-dimensional dynamics of the markets and their affects on the economy and your business growth strategies. Corporate Finance Associates’ Energy Practice Group is dedicated to staying current on the changes in the Energy Markets and to identifying long-term trends. Led by Chairman Bud Boles, an industry veteran with more than 50 years of global experience, the CFA Energy Practice Group publishes a quarterly newsletter that reports and analyzes these changes.
Some recent headlines: Crude oil prices were propelled higher at the end of January 2011 due to political unrest in Egypt and the Middle East. According to the International Energy Agency Oil Market Report, global oil product demand has been revised up by 120 kb/d. IEA reported that, at 87.8 mb/d in 2010, global oil demand rose by 2.8 mb/d year-on-year, and should reach 89.3 mb/d in 2011 (+1.5 mb/d year on-year). There are many significant uncertainties that could push oil prices higher or lower than current expectations.
Among the uncertainties are decisions by key OPEC member countries regarding their production response to the global recovery in oil demand; the rate of economic recovery, both domestically and globally; fiscal issues facing national and sub-national governments; and China’s efforts to address concerns regarding its growth and inflation rates. In addition, even though Egypt is not a major supplier of crude oil or natural gas to world markets, the recent unrest in that country which has spread throughout the region raises concerns over world energy supplies. Key transit routes for energy and other goods could be disrupted, while pipelines and ports could become targets for warring factions.
To read the 2010 Q4 Energy Newsletter for more Energy Market information click here.
Posted by Roy Graham.