Energy Price Forecasts: ELD Asset Management Highlights Key Drivers of Rising Costs and Potential Implications for Inflation
SINGAPORE / ACCESS Newswire / February 10, 2025 / ELD Asset Management, a Singapore-based investment management practice says that it expects energy prices to rise notably in the first 6 months of 2025 and cites crude oil as the likely standout in which higher prices could have serious implications for inflation. The firm's researchers point to several key factors that are likely to drive an upward trend in energy markets.
Energy price challenges
As the global economy continues to recover from the disruptions caused by the COVID-19 pandemic, increased industrial activity and mobility are fuelling higher energy demand. Furthermore, researchers predict that the ongoing coordination among OPEC+ countries - including Russia - aimed at managing oil supply is projected to support prices by striking a balance between production levels and global demand that favours producers.
Geopolitical risks
Persistent geopolitical risks in major oil-producing regions, mainly the Middle East and parts of Africa, are likely to create supply concerns if resolution of long-standing animosities between Israel, proxies for Iran and the wider Arab world remain elusive, adding upward pressure on crude oil prices.
Climate-related disruption
Finally, the researchers posit that seasonal weather patterns and potential disruptions from extreme weather events could further impact supply chains and refine capacity, contributing to price volatility and increases.
Implications for investors
ELD Asset Management advises clients to factor in the implications of rising energy prices in their investment strategies. Energy producer and oil services stocks could offer attractive opportunities for investors looking to capitalise on this trend.
"We believe the energy sector is poised for growth in the first half of 2025, with crude oil prices likely to trend higher due to a confluence of demand recovery and supply-side factors," said George Palmer - Director of Private Clients at ELD Asset Management. "There are potential headwinds for oil prices including the prospect of an end to the Russo-Ukraine war but all the available evidence appears to suggest that they're heading higher," he concluded.
Additional perspectives
ELD Asset Management's researchers suggest that higher oil prices will almost certainly lead to spikes in inflation reasoning that transportation costs feed into most aspects of global production and service provision. They suggest that clients may want to consider increasing allocations in inflation hedges including precious metals and inflation-linked bonds.
About ELD Asset Management:
At ELD Asset Management, we combine research-driven strategies, personalised solutions, and a commitment to transparency to help you achieve your financial goals. With a global perspective and local expertise, we offer tailored investment solutions that prioritise long-term growth and stability.
ELD Asset Management Pte. Ltd.
Media Contact: Mr. Luke Tan
Email: luke.tan@eldglobal.com
Website: www.eldglobal.com
SOURCE: ELD Asset Management
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