More to the weakness in energy prices than trade

While President Trump’s latest tariff threat has added yet more fuel to the oil market’s fears about slowing global growth, the continued malaise in the prices of coal and natural gas reflects more long-standing issues than the most recent twist in the trade war. Granted, the prices of these commodities fared a bit better in July, but the bigger picture is that they are still down by around 30 to 50% year-to-date. Given that the global surge in natural gas production, as well as the structural downturn in coal demand, seem likely to persist for some time yet, we expect gas and coal to remain low in 2020-21.