Where are fossil fuels prices heading?

Abstract

Purpose

The purpose of this paper is to present forecasts of fossil fuels prices until 2030 with spectral analysis to provide a clearer picture of this energy sector.

Design/methodology/approach

Fossil fuels prices time series are decomposed in simpler signals called approximations and details in the framework of the one-dimensional discrete wavelet analysis. The simplified signals are recomposed after Burg extension.

Findings

In 2019-2030 average price forecasts of: West Texas intermediate (WTI) oil ($58.67) is above its 1986-2030 long-term mean of $47.83; and coal ($81.01) is above its 1980-2030 long-term mean of $60.98. On the contrary, 2019-2030 average of price forecasts of: Henry Hub natural gas ($3.66) is below its 1997-2030 long-term mean of $4; heating oil ($0.64) is below its 1986-2030 long-term mean of $1.16; propane ($0.26) is below its 1992-2030 long-term mean of $0.66; and regular gasoline ($1.45) is below its 2003-2030 long-term mean of $1.87.

Originality/value

Fossil fuels prices projections may relieve participants of WTI oil and coal markets but worry participants of Henry Hub, heating oil, propane and regular gasoline markets including countries whose economy is tied to energy prices.

Citation

Rostan, P. and Rostan, A. (2021), "Where are fossil fuels prices heading?", International Journal of Energy Sector Management, Vol. 15 No. 2, pp. 309-327. https://doi.org/10.1108/IJESM-07-2019-0009