Brent crude oil prices started strong in 2020, but they plummeted in the second quarter.
The EIA forecast that Brent crude oil prices will average £47/barrel in the second quarter of 2021 and £44/barrel later in the year. The price increase also reflects supply limitations by the Organisation of the Petroleum Exporting Countries (OPEC) and OPEC partner countries. OPEC has been limiting oil production due to decreased demand during the pandemic. At its March 2021 meeting, OPEC announced the production cuts would continue through at least April. Prices are increasing, also due to higher demand, as more people are vaccinated against COVID-19. Additionally, OPEC is continuing to limit production to reflect the decreased demand for oil during the pandemic.
The price of gas in the United Kingdom is forecast to amount to 37.6 pence per term by 2024/25. This would translate into a 38% decrease compared to 2018/19, when gas prices reached a peak of 60.7 pence per therm. Between 2018/19 and 2020/21, figures are expected to fall by over 56% before increasing again in the following years. Combined household expenditure on energy derived from gas reached 13.83 billion British pounds in 2019. Spending had seen only slight fluctuations since 2010, with the most prominent being a jump to 17.1 billion British pounds in 2013. That year corresponds with supply problems from a Norwegian plant — the UK’s lead exporter — and below-average winter temperatures across the country. The fall in natural gas prices is accompanied by declining production levels. With onshore shale gas extraction suspended as of November 2019 and many offshore oil and gas fields depleted, the country is set to become more reliant on energy imports.
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