Oil, gas prices fall more than other commodities during 2015 – EIA

2015 was rough year for commodity prices, but energy declined much more than grains or metals

The energy component of the widely followed S&P Goldman Sachs Commodity Index fell 41 per cent from the start of 2015, according to the US Energy Information Administration.

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Source: Bloomberg L.P.

Energy suffered a larger decline than the industrial metals, grains, and precious metals components, which declined 24 per cent, 19 per cent, and 11 per cent, respectively, in 2015.

Weakness in global economic growth contributed to the overall decline in commodity markets in 2015, but unique supply-side factors within certain commodity markets also affected prices.

Each of the 16 commodities in the S&P GSCI Energy, Grains, Industrial Metals, and Precious Metals indices declined in 2015, with prices of some of the energy commodities falling more than 30 per cent.

Energy. West Texas Intermediate (WTI) and Brent, two of the major crude oil benchmarks, account for about 69 per cent of the weighting in the S&P GSCI Energy index. As a result, the energy index tends to follow major price movements in the crude oil market.

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Source: Bloomberg L.P. Note: These commodities are included in the S&P GSCI Energy, Grains, Industrial Metals, and Precious Metals indices. All price changes reflect changes in front month futures contract price for each commodity. WTI is West Texas Intermediate, RBOB is reformulated gasoline blendstock for oxygenate blending, and ULSD is ultra-low sulfur diesel.

With sustained, high crude oil production from countries like Saudi Arabia, Iraq, the United States, and Russia, global liquid fuel inventories rose significantly in 2015, resulting in crude oil prices falling to 11-year lows in Dec.

Petroleum-based products such as reformulated gasoline blendstock for oxygenate blending (RBOB), ultra-low sulfur diesel (ULSD), and gasoil together comprise 27 per cent of the S&P GSCI Energy index. RBOB not only had the lowest price decline of all energy commodities, but it also declined less than many nonenergy commodities because of increased gasoline consumption in the United States and in other countries.

In contrast, gasoil and ULSD had the largest price declines of the energy commodities as a result of rising U.S. and global distillate inventories along with lower economic growth in emerging markets.

Natural gas accounts for the remaining 4 per cent of the S&P GSCI Energy index, and in 2015, natural gas futures prices declined to the lowest level in 16 years in mid-December because of increased production and record-high inventory levels.

 

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