The energy crisis that pushed up Australian utility bills has eased but will not disappear in 2023, as the Ukraine war continues to drive uncertainty, a leading forecaster has predicted.

Commonwealth Bank commodities analyst Vivek Dhar said on Tuesday that fears about a global energy shortage have lessened in recent months, pushing down LNG and coal prices.

“LNG and thermal coal prices have plummeted from their respective peaks in August and September last year,” Mr Dhar said.

“Concerns that Europe would face energy shortages this winter have not come to pass.”

But, in a new report, he warns prices for LNG, coal and oil will remain relatively high in 2023 as the Ukraine war and international sanctions on Russia cause ructions across global markets.

It means the pressures that have pushed up household bills in 2022-23 are easing, but still haven’t disappeared entirely with retailers starting to pass through double-digit price hikes.

Gas demand eases

LNG futures have fallen more than 50 per cent since the start of 2023 and are now about 80 per cent lower than peaks reached in August, reflecting lower gas demand, Mr Dhar said.

“European gas futures have plunged on milder weather reducing seasonal demand, efforts to curb gas consumption and demand destruction,” he said.

But whether enough gas will be produced in 2023 to meet global demand remains to be seen; with the “balance of risks” pointing to higher prices than currently, but below that seen in 2022.

“The risk that LNG markets tighten later this year is largely contingent on whether the expected rise in LNG imports from Europe and China can be met with LNG supply growth,” Mr Dhar said.

“Weather will play an important role in determining the extent of gas demand in Europe and China in the upcoming winter season (October 1, 2023, to March 31, 2024). Price-sensitive LNG importers in South Asia will likely be an important factor, too.”

Oil prices go sideways

Global oil prices, which are a key input flowing into Australian petrol bills, are “tracking sideways” in early 2023, Mr Dhar said.

The analyst expects subdued oil demand from advanced economies in 2023 as higher interest rates and inflation reduce growth, which will support lower prices.

However, higher oil demand in India and questions about the degree of disruption to Russian oil supplies amid sanctions are key price risks on the horizon, Mr Dhar said.

“Russia could potentially cut pipeline exports to Europe (about 0.7 per cent of global supply) and even restrict Kazakh oil that passes through Russia (about 1 per cent of global supply),” he said.

“The threat of Russian-led supply cuts has increased following sanctions that banned sea-borne exports of Russian crude oil and refined product to the EU.”