Energy prices: Here’s what makes energy markets fluctuate


We live in uncertain times, with unstable commodity demand, financial market volatility and changing geopolitics upending global energy markets.

Events like these are beyond the control of most policymakers, leaving them facing some tough decisions concerning their energy strategy, as taking a wrong turn could be costly.

But what fuels the peak-and-slump price cycles of global oil, natural gas, wind, solar and other energy sources?

A variety of factors drive energy prices
A variety of factors drive energy prices

While the cost of electricity may seem to change at random, energy prices are guided by a range of external factors. As the infographic above shows, different forces influence global demand and supply, helping determine which fuels increase in price and which fall.

Market regulations, carbon pricing schemes, geopolitics, commodity prices and extreme weather events like droughts, floods and storms can all play a part.

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