Oil and coal are still the most widely used primary energy sources in global terms. Both markets remain relatively concentrated, meaning that individual players can theoretically exercise market power. The oil market has changed significantly in recent years – driven by the increased use of shale oil in the USA – and prices have fallen sustainably.
In industrialized countries, coal is coming under increasing pressure as the most CO2-intensive fossil fuel: due to falling gas prices and increased efforts to reduce greenhouse gases and protect the climate. At the same time, however, coal remains an important resource in many developing and emerging countries, especially in China and India.
The EWI has extensive expertise in the global markets for coking and steam coal. Since 2011, the EWI has regularly sent two staff members to the International Energy Agency (IEA) in Paris to contribute to various market reports. One example is the annual Coal Market Report, which describes the global coal sector’s state (production, consumption, trade, and prices of steam, coking, and lignite coal). It also provides developments, trends, and a forecast of production, consumption, investment, and trade for the coming years.
The EWI creates scenarios for the development of the steam and coking coal markets with the EWI’s own coal market model TIMCO. This is a long-term equilibrium model that simulates developments in the global coal market up to 2030, taking global interdependencies into account. The model can also depict the strategic behavior of individual players on the coal market.
In the global oil market context, the EWI analyzes market structures and their effect on the oil price. For this purpose, the Institute has developed, among other things, the EWI’s own oil market model, DROPS, which allows a fundamental analysis of oil market developments.
The model simulates the global crude oil market in different scenarios and determines production volumes, imports, exports, and prices. The various agents with their preferences (e.g., OPEC and non-OPEC suppliers) can be modeled and examined.