Scares and black swans aside, the forecast of the Repsol Research Service for 2023 is that the year will be much quieter in the oil, gas and electricity markets than it was in 2022. Its director, Antonio Merino, rules out that throughout this year the price escalations that were faced last year will be repeated.
“I do not expect volatility like that of 2022. Last year the risk premiums listed the uncertainty of what was going to happen with the sanctions against Russia. Now it is clear. We know that Russia has been able to get its products through third countries and that has diluted the fear of shortages that was listed a year ago," he explained this Friday during the presentation of Repsol's Energy Statistical Yearbook, in which they also participated analysts Juan Rubio and José Alfredo Peral.
The reasons on which these analysts base their forecasts are based on the fact that Europe still has its gas reserves at levels well above the average and at the same time that demand has fallen in some cases due to lower consumption, but above all because it It has destroyed industrial demand. What makes the tension on the prices of gas and its derivative in electricity are much lower than those of a year ago.
The price of electricity will also be driven downwards in Europe by the savings dynamics that the crisis has generated, the drive for self-consumption and as well as by the climatic conditions of the remainder of winter. "This year it is also expected that a greater contribution to the energy mix of hydropower, which last year was very low, and also of solar and wind power with higher production than in previous years."
France will continue with the problems in its nuclear plants, so it is expected that, as happened in 2022, Spain will continue as an export market, which will force it to increase the production of electricity with combined cycles and therefore the fall in the price of electricity will be mitigated. electrical production.
In the case of oil, the situation is somewhat more complicated. Merino has drawn a scenario in which he places the barrel of Brent, (reference oil in Europe) between 80 and 85 euros until June. "For the last half of the year, the consensus of analysts predicts that there will be a shortage, which could push prices up to 100 euros," explains Merino.
The director of Repsol's Research Service explained that the fear of the markets a year ago was that Russian oil and gas would be blocked as a result of the war, but after a year of conflict the market has detected that this shortage has not arrived.
“There are Asian countries that are exporting more than they produce, so it is clear that the ghost ship market has allowed Russia to market its production. We know that Russian diesel arrives from other places”.
With no fear of shortages and with diesel inventories at historically high levels and demand falling sharply in Europe, the analyst predicts that diesel prices will remain below gasoline prices as usual before the crisis.
The turning point in the complicated balance of prices is set by China. “Everything will depend on the strength with which consumption recovers in China. If the demand is very strong, it will push up the prices of gas and gasoline, which is what is consumed the most there”.