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Energy trends: prices to stay low, conference finds


The energy industry has been caught unaware by falling prices. An annual event in Houston saw insiders explain why costs are likely to stay low.

IHS’s CERAWeek energy conference is a big event for the energy industry. This year saw executives, analysts, academics and government officials from across the globe fret over low prices and dwindling profits.

Energy is at a turning point, said chief researcher, global oil markets and energy scenarios at IHS Jim Burkhard. Several trends coming together have shaped this environment, he added, most importantly:

  • The revival of the US oil production, which has changed the balance of the global oil market, potentially for years to come.
  • OPEC’s decision last November not to cut production volumes in the face of falling prices. “[This] signalled the end of an era that started in the 1970s, when OPEC first seized pricing power,” said Burkhard.

There is the potential for prices to rise or to fall even further, with Burkhard talking of a range of $30 per barrel of oil to $130 per barrel. He said that two important questions will decide which way energy prices move:

  • The cost of developing new oil fields
  • The rate of demand growth in China

Your energy prices

At the event, many speakers seemed to agree that fossil fuel prices will stay far cheaper than they have been for the past few years. Quoted by AP, BP CEO Bob Dudley predicted that prices would be “Lower for longer”.

For smaller UK businesses, lower energy bills are an advantage in an otherwise difficult time. But many UK businesses are unaware that they still are paying too much. SwitchMyBusiness.com offers a straightforward solution, cutting bills by up to 70%, with exclusive supplier rates. Thousands of businesses have already saved an average of £747 per switched meter with a call that takes less than five minutes.

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For an impartial expert option on which energy supplier is best for your business, fill in the form at the top right of this page or call 0800 411 8830

For more in-depth analysis of the CERAWeek energy conference, see Part 1 and Part 2 of the WSJ’s comprehensive analysis of the trends discussed.

(image courtesy of IHS)

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