Publications / Articles
Light at the end of the tunnel?Potential effects of the fall in oil price on the profitability of natural gas based electricity generationPublished: 1 of March, 2015

Brent crude price displayed an unstoppable fall from July 2014, which was still ongoing in January 2015. The cause of the price drop was fundamental supply and demand: shale oil producers in North America produced an oversupply in oil, which was matched with dwindling global crude oil demand (notably in China). Despite the oversupply, OPEC (Saudi Arabia) was reluctant to cut its production, since they were protecting their market positions. The crude price, which was floating at 100-110 $/barrel in the first half of 2014, was traded as low as $46 /barrel in January 2015, a level that has not been seen since the financial crisis in 2008 (42 $/barrel).