Energy market faces uncertain period ahead, with oil prices up in the air

The current state of the energy market is still pending according to Senior Executive Officer of BDSwiss, Daniel Takieddine. Analysis from Takieddine revealed the uncertainty in the energy landscape as a result of various movements in the market.

Restraint on the price movements and not knowing what to expect when it came to traders' sentiment caused part of the unknown status within the energy market. The economic factors not being known meant market forces were not totally clear and in turn it was harder to know what to expect.

Over recent weeks, central banker speeches in addition to data releases in succession have led there to be doubts over the market's future movements. It was revealed from the job market figures that the inflation levels were higher than what was estimated. This came despite interest rate hikes being eased by the Federal Reserve, as their president made the choice to ease down.

According to Trading Economics, inflation figures coming out of the US for January 2023 were at 6.4%, down slightly from 6.5% for December 2022. This was despite the market forecasting that it would be down further to 6.2%.

This has led to greater unpredictability with market movements as prices could change suddenly. There was also a concern these inflation figures would result in interest rates remaining higher than expected for longer periods ahead.

The demand for energy on a global scale may potentially arise from the unpredictability of the US market, one of the major contributors to the global market space. The price of energy in the US has seen a rise from 8.7% this past January from 7.3% last December.

Economic growth could also be heavily impacted from market confusion as investors may not be fully convinced on the correct strategies to persist with.

Necessary to helping the market get back on its feet and reach greater levels of productivity depends on their being more belief that the economic growth can come from all over the globe. Crucial to the medium term is China, as greater activity there can increase the demand for natural gas and oil and as a result push up prices.

The change in prices rising would also be favoured by supplies as OPEC is set to be able to maintain their levels when it comes to productivity.

Also, this March is set to see Russia possibly cut down on their own oil production. Their output being reduced may play a significant part in the shaping of the market ahead.

The past two months has seen there be stability brought to oil prices in comparisons to the costs in the previous year. The continuation of supplies remaining behind demand growth could result in the price of oil going back up again.

In the near future there is the possibility that the market could be significantly impacted by the crude inventory levels being larger than originally predicted. Up ahead as well, the demand for oil derivatives could be taken to greater levels of need as China, a significant player in the market, are opening up air travel in their regions.

However, the price of natural gas may stay under pressure due to temperatures being warmer than originally forecasted. Also, big stocks were able to be secured from regions including Europe.

Although, come the summer, matters may me quite different to the current landscape. This is as air conditioning will become much more desired over the summer months, hence more natural gas will be in pursuit. From this, the medium term may consist of a high price resurgence.