Energy commodity prices in the last quarter of 2018 fell significantly, the U.S. Energy Information Administration (EIA) said on Wednesday.
The spot energy index in the S&P Goldman Sachs Commodity Index (GSCI) ended the year 21 percent lower than at the beginning of the year, according to EIA.
Although all components of the S&P GSCI fell in 2018, the S&P GSCI energy index fell more than any other sub-index. Steep declines in crude oil and petroleum product prices in the fourth quarter of 2018 contributed to the decline in the S&P GSCI energy index.
West Texas Intermediate (WTI) and Brent, two major crude oil benchmarks, account for 71 percent 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.
For most of 2018, crude oil prices rose because of the increased potential for supply constraints and declining global petroleum inventories. Brent crude oil reached a four-year high of 86 U.S. dollars per barrel on Oct. 3, 2018.
However, several factors contributed to the subsequent sharp fall in crude oil prices. Meanwhile crude oil production in the United States, Russia and Saudi Arabia increased to or went near record highs.
Moreover, concerns about slowing global economic growth and its impact on oil demand also contributed to recent declines in crude oil prices.
Petroleum-based products accounted for 22 percent of the S&P GSCI energy index in 2018, and natural gas accounted for the remaining 7 percent. The former component had the price decline, while the latter remained relatively stable.
The S&P GSCI is a weighted average of commodity prices intended to reflect global commodity production quantities and futures contracts' trading volumes. The weights associated with individual commodities within the S&P GSCI are updated every year.
The spot energy index in the S&P Goldman Sachs Commodity Index (GSCI) ended the year 21 percent lower than at the beginning of the year, according to EIA.
Although all components of the S&P GSCI fell in 2018, the S&P GSCI energy index fell more than any other sub-index. Steep declines in crude oil and petroleum product prices in the fourth quarter of 2018 contributed to the decline in the S&P GSCI energy index.
West Texas Intermediate (WTI) and Brent, two major crude oil benchmarks, account for 71 percent 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.
For most of 2018, crude oil prices rose because of the increased potential for supply constraints and declining global petroleum inventories. Brent crude oil reached a four-year high of 86 U.S. dollars per barrel on Oct. 3, 2018.
However, several factors contributed to the subsequent sharp fall in crude oil prices. Meanwhile crude oil production in the United States, Russia and Saudi Arabia increased to or went near record highs.
Moreover, concerns about slowing global economic growth and its impact on oil demand also contributed to recent declines in crude oil prices.
Petroleum-based products accounted for 22 percent of the S&P GSCI energy index in 2018, and natural gas accounted for the remaining 7 percent. The former component had the price decline, while the latter remained relatively stable.
The S&P GSCI is a weighted average of commodity prices intended to reflect global commodity production quantities and futures contracts' trading volumes. The weights associated with individual commodities within the S&P GSCI are updated every year.
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