«A false feeling of resignation in energy market dynamics seems to continue unabated into the new year despite rising geopolitical concerns, especially in the Middle East.”, notes in its Editorial IENE’s latest Energy Weekly Report which was sent to members and associates earlier today.
In the same vein the Editorial, adds, «How else to explain price rise restrain, for both crude oil and natural gas, as the current conflict, originating in Israel’s war in Gaza, is now threatening to spill over to the wider region. Partly this is already happening if we are to judge from rising tensions in Israel’s northern borders as Hezbollah is mulling scaling up its campaign against Israel, following the assassination by an Israeli drone of Iran’s senior military officer in Lebanon Saleh Al Arouri earlier this week, and the continuing missile campaign by the Houthi rebels in Yemen in their targeting of international shipping.»
«If the above were not enough we have the bloody re-emergence of ISIS earlier this week following the two bombings in the Iranian city of Kerman which spread havoc and caused the death of more than 100 people with tens of severely wounded. At the same time the Russo -Ukrainian war, soon to enter its third year, carries on with unstoppable viciousness by both sides, the almost daily bombardment of Ukrainian cities by Russian missiles and rising civilian loss of life and continuing Russian military casualties. Yet, energy markets remain calm as they appear to have discounted long ago the inevitability of localised military conflicts, as we slowly move into a new type of world order where technology matters more than politics and the winners in the battlefield are the ones who can master better electronics, smart systems and AI.»
«Although energy markets appear tranquil from the outside as commodity prices remain subdued, it has been a bumpy start to the year for oil and less so for gas. Nevertheless, with Brent oil trading well below $ 80 per barrel and European gas prices at TTF hovering around at € 33 / MWh, the scenery is far more favourable to the consumer than it was a year ago. Undoubtedly there is less for a new wave of price rises as most countries are well supplied with gas, with average underground gas storage levels near 80% full, while global oil inventories are on the rise following excess production by non OPEC producers, especially from the USA, and restrain on the part of OPEC which keeps loosing market share as it is forced to lower production and exports in order to maintain market stability.»
«At the same time further renewables growth is hampered by strong headwinds the result of high borrowing costs, shortage of raw materials, elevated prices and permitting challenges. Still solar energy is expected to drive global growth, with installations expected to increase 7% yoy, while onshore and offshore wind additions will dip slightly from 2023. Most of the renewable energy will be deployed in China, which is expected to account for a staggering 55 per cent of new global renewable capacity this year, according to the IEA. 2024 is also expected to be a “make or break” year for clean hydrogen as at least nine countries have announced subsidies in order to boost the nascent fuel’s production. A lot will depend though on economic developments and if growth in the global economy will return to a healthier state.»
