The cost of energy is quite important.
Situasi ID – Large amounts of energy are required by developed civilizations to run their factories, grow and store food, move people and products around, and heat and cool our homes.
An excessive price increase drives up the cost of living. This was a problem that was brought to light two years ago when Russia’s invasion of Ukraine and economies that were recovering from the coronavirus pandemic combined to drive up energy prices.
This contributed to a global inflation surge, which in turn prompted interest rate increases by central banks, driving up borrowing costs for both consumers and enterprises. The impacts of that inflationary shock are only now beginning to fade.
Household bills in the UK, where gas and electricity costs are capped, are currently at their lowest point in two years, albeit they are still expensive by historical standards. Conversely, excessively low energy costs take away the motivation to invest in greener, more efficient technologies, which may result in increased emissions. Where do you think prices will end up in the upcoming year?
Oil
One of the main worldwide benchmarks, Brent crude oil, reached a top price of $139 per barrel in 2022 and averaged about $100. With a peak of $98 and an average of $83, last year was somewhat calmer.
This was true despite things like the powerful producing nations that make up OPEC+ deciding to prolong and even expand their output cuts in an attempt to keep prices stable. In addition, the battle between Israel and Hamas was causing tensions to rise throughout the Middle East.
According to a survey by analysts at the trade news agency Energy Intelligence, the demand for oil is predicted to rise by about 1.1 million barrels per day over the course of the next twelve months. But they think additional output from sources outside of OPEC+ will be sufficient to meet that demand.
This implies that pricing ought to stay mostly steady. But the International Energy Agency (IEA) has issued a warning, saying that “markets are on edge due to rising geopolitical tensions in the Middle East, which accounts for one third of the world’s seaborne oil trade.”