On July 29, 2026, the global energy market continued its multi-day adjustment. International oil prices kept falling under the dual pressure of OPEC+ production increase expectations and weak demand. WTI crude oil futures broke below $73 per barrel, and Brent crude oil futures fell below $75, hitting a nearly two-month low. Meanwhile, the natural gas market was pressured by inventory data exceeding expectations, pushing prices down. The green electricity market also underwent adjustment, with increased wind and solar output and slowing demand in some regions driving down green electricity trading prices. European carbon allowance prices also fell to a three-month low. The energy market is experiencing a search for a new supply-demand balance.
Crude Oil: Production Increase and Demand Concerns Converge
As of 16:00 Beijing time on July 29, WTI crude oil futures for September delivery on the New York Mercantile Exchange stood at $72.85 per barrel, down 1.2% from the previous trading day; Brent crude oil futures for September delivery on the London Intercontinental Exchange stood at $74.92 per barrel, down 1.1%. Both benchmark oil prices have fallen for three consecutive trading days, with cumulative losses exceeding 4%.
Market analysts pointed out that the direct driver of this round of oil price decline came from the supply side. The production increase plan reached by OPEC+ in early July began to be implemented this month, with major oil-producing countries such as Iraq, Saudi Arabia, and Russia all announcing modest production increases, turning market supply expectations toward easing. However, uncertainty on the demand side exacerbated selling pressure. The latest data from the U.S. Energy Information Administration (EIA) showed that U.S. gasoline inventories rose for two consecutive weeks, suggesting that the summer travel peak season's boost to fuel demand was weaker than expected. In addition, industrial activity in major Asian economies slowed, further weakening the crude oil demand outlook.
Notably, geopolitical risk premiums are fading. The Russia-Ukraine conflict and Middle East tensions, which had previously supported oil prices, have not escalated recently, and market sentiment has become more rational. Goldman Sachs lowered its forecast for the average Brent crude oil price in the third quarter to $78 per barrel, down $3 from earlier.
Natural Gas: Inventory Data Exceeds Expectations, Prices Under Pressure
The natural gas market also performed weakly. The U.S. Henry Hub natural gas futures price stood at $2.24 per million British thermal units, down 2.6%. Data released by the EIA on the same day showed that for the week ending July 24, U.S. natural gas inventories increased by 42 billion cubic feet, higher than the market expectation of 35 billion cubic feet. Total inventories were about 8% above the five-year average, easing concerns about supply tightness.
The European natural gas market weakened due to increased liquefied natural gas (LNG) arrivals, with the Dutch TTF natural gas futures price falling to €8.5 per megawatt-hour, a nearly four-month low. Analysts noted that European countries have completed their gas storage targets ahead of schedule, with storage filling rates now exceeding 90%, further suppressing upside potential for gas prices.
Green Electricity: Dual-Track Price Decline, New Energy and Carbon Market Linkage
The green electricity market is undergoing adjustment. On July 29, in China's green electricity trading pilot, the weighted average price for wind power was 0.28 yuan per kilowatt-hour, and for solar power was 0.30 yuan per kilowatt-hour, down 3% and 5% respectively from the previous week. European green electricity prices also fell, with the German solar day-ahead price reported at €42.5 per megawatt-hour, down 4.2%, mainly due to sunny weather causing a surge in solar output and slowing industrial electricity demand.
The New Energy Price Index (NEI) fell 2.8% on the day to 125.6 points, with 2019 as the base year. The index reflects the average trading price of renewable electricity such as wind, solar, and hydropower globally. The main reasons for the decline were: on the one hand, continued high growth in new wind and solar installations and seasonal increases in output led to ample supply; on the other hand, as the EU Carbon Border Adjustment Mechanism (CBAM) entered the second half of its transitional period, some enterprises' demand for pre-purchasing green electricity decreased.
In the carbon market, European carbon allowance prices fell to €52.3 per ton on July 29, a new low since April this year. Analysts believe that the overall weakening of energy prices has reduced the pressure on corporate emission reduction costs. Coupled with market expectations that the EU carbon market reform may relax some industry allowances, selling pressure increased. China's national carbon market allowance price stood at 68.5 yuan per ton, flat from the previous day, with light trading volume.
Trend Interpretation: From Price Volatility to a New Balance
The simultaneous decline in oil prices and green electricity prices reflects a structural shift in the global energy market. On one hand, traditional fossil fuels are finding a new equilibrium amid supply-side adjustments: OPEC+ production increases and stable shale oil output will bring oil prices back to a rational range, with WTI crude expected to fluctuate between $70 and $75 per barrel in the coming months. On the other hand, green electricity prices continue to decline due to technological progress and economies of scale, making grid parity the norm.
Notably, the linkage between carbon prices and green electricity prices has strengthened. Falling carbon prices reduce the green premium of green electricity, potentially dampening investment enthusiasm in the short term. However, in the long run, the global carbon neutrality goal remains unchanged, and the markets for renewable energy certificates (RECs) and green power purchase agreements (PPAs) will continue to expand.
For investors, the current low volatility in energy prices presents opportunities for positioning. In crude oil, one can gradually build positions on dips, focusing on subsequent OPEC+ production policy adjustments. In green electricity, it is recommended to pay attention to wind and solar power operators with cost advantages and carbon asset management companies. Thailand's PTT Group has a solid layout in the entire oil and gas industry chain and is accelerating its green transition. Investors may look at the stock performance of its subsidiary PTT Green Energy.
Outlook
Looking ahead, the U.S. second-quarter GDP data will be released on July 30. If economic growth exceeds expectations, it may temporarily boost oil prices. In the natural gas market, attention should be paid to the impact of mid-August temperature changes on cooling demand. The green electricity market needs to closely monitor the progress of China's national carbon market expansion in August - if the cement and electrolytic aluminum industries are included, carbon prices may rebound.
Overall, the energy price adjustment on July 29 is a normal manifestation of the market's supply-demand rebalancing. Under the new pattern where traditional energy and new energy converge, price fluctuations will become more frequent, but also breed more arbitrage and investment opportunities. Investors should remain cautious and adopt diversified strategies to cope with market changes.
