For almost a year, the US and China have been involved in a trade war, which has had a lot of influence across of the markets. Especially at the end of 2018, the stock markets fell significantly due to the long-lasting conflict, and disappointing key figures from China have shown, that the most populated nation in the world is suffering from the trade war. The weakening economy in China, and fears that the slowdown could spread to the rest of the world, made the oil price fall, and this has affected the rest of the fuel markets and thereby also the power prices in Europe.
Due to the weak key figures and fears of a long-lasting decline in demand, the oil price fell to the lowest level in around one and a half year in December, as it dropped to around 50 US dollars per barrel. The downturn was, according to several analysts, caused by the effects of the trade war.
Now however, there are hopes that a solution could be on the way in the conflict. Back in December, the two countries agreed to put the conflict on hold, and this week, representatives of the two countries are meeting in Beijing to negotiate a permanent solution. Rumors are, that Donald Trump, who previously did not want to make any compromises, now want a solution to the conflict to help the falling stock markets.
The oil market has rebounded this week due to the optimism regarding a potential end of the trade war, and the price on a barrel of oil is now back at around 60 dollars. The stock markets have increased significantly as well during the week.
January 22, 2019. Mikkel Hauge Jensen is Senior Energy Risk Advisor for our customers at Energi Danmark. To Mikkel dedication and the profound interest in the electricity market are the driving forces.
The temperatures have dropped below the norm in the Nordic region, and the prospects of the cold continuing for the remainder of the month caused the electricity prices to rise last week. All of Europe is affected by the cold weather.