Global slowdown to drive a fall in energy prices

Our forecast of slower global growth in 2019-20 is a key factor underpinning our bearish outlook for the prices of oil and coal. What’s more, we expect further declines in global equity markets and a resilient US dollar this year, suggesting that investors will exit riskier asset classes, including commodities. That said, we are more positive on the outlook for the price of natural gas as its greener properties should mean that demand holds up rather better. We also think oil prices will start to recover in 2020 as the Fed starts to cut interest rates, China’s economy stabilises and investors become less risk averse.