Key Takeaways:
Apollo’s Expert Briefing Series is a monthly virtual roundtable focused on a variety of infrastructure and transition investing topics. Moderated by Jonathan Silver, Chair of Apollo’s Global Sustainability Platform, these 45-minute discussions share insights from the industry’s top experts for Apollo clients and prospects. Register today to access the full library of Expert Briefing conversations and join us for future sessions.
Jonathan Silver and panelists Al Salazar, Kushal Patel, and Brent Nelson discuss the current state of energy price forecasting and how evolving market conditions are shaping expectations across electricity, natural gas, oil, and broader power and energy markets. Against the backdrop of rising power demand, geopolitical instability, infrastructure constraints, and changing energy systems, the discussion highlights the increasing complexity associated with forecasting future energy prices and long-term power market dynamics.
A central theme throughout the discussion is the growing interconnectedness of global energy markets. Oil, natural gas, and power markets are increasingly influencing one another through trade flows, infrastructure dependencies, and broader macroeconomic conditions. Geopolitical disruptions, including conflict in the Middle East and the war in Ukraine, are contributing to greater energy market volatility across commodity and electricity markets. Supply risks, shifting trade dynamics, and energy security concerns are influencing both short-term pricing volatility and longer-term market expectations.
Forecasting methodologies vary significantly depending on the time horizon being evaluated. Forecasting approaches differ across trading, infrastructure investment, utility planning, and long-term asset development. In the near term, weather remains one of the most important forecasting variables because it affects electricity demand, renewable generation, and fuel consumption simultaneously. Over longer periods, forecasting models rely more heavily on assumptions around infrastructure development, policy frameworks, technology deployment, and future electricity demand growth. Forecasting models are most useful when evaluating ranges of potential outcomes rather than predicting exact future prices.
AI-driven electricity demand, electrification, industrial activity, and rising data center demand emerge as defining themes throughout the discussion. Growing power demand is increasing pressure on generation capacity, transmission systems, and broader grid infrastructure across multiple regions. At the same time, infrastructure constraints, permitting delays, and interconnection bottlenecks continue to affect how quickly new supply and transmission capacity can be brought online.
The discussion also highlights how renewable energy integration and battery storage deployment are changing electricity market dynamics. Higher renewable penetration is contributing to greater variability in electricity generation, pricing and shifting power market conditions across regions. Electricity markets are increasingly balancing periods of oversupply alongside scarcity pricing and greater volatility.
Natural gas and liquefied natural gas (LNG) markets continue to play an important role in energy price forecasting and electricity pricing. LNG trade flows and regional gas pricing dynamics remain central to domestic and international energy markets. While the United States remains relatively insulated compared to Europe and Asia because of domestic natural gas supply advantages, expanding LNG export capacity could increasingly connect U.S. gas markets to international pricing dynamics over time.
Another key theme is the growing use of scenario-based forecasting and probabilistic analysis. Infrastructure development, fuel markets, regulation, and technology adoption contribute to long-term energy market uncertainty and broader scenario analysis across power and commodity markets. Political and regulatory changes can also materially alter long-term market expectations, particularly across energy infrastructure and generation markets.
The discussion also examines how electricity markets may evolve in response to rising infrastructure costs and accelerating demand growth. Demand response, distributed generation, battery storage, and more dynamic pricing structures are identified as potential mechanisms for improving grid flexibility and managing peak electricity demand more efficiently over time.
From an investment perspective, infrastructure development, transmission expansion, generation equipment, storage, and energy-related supply chains are identified as areas positioned to benefit from long-term electricity demand growth. At the same time, unrealistic assumptions around future load growth and infrastructure deployment could contribute to capital misallocation and greater pricing volatility.
Looking ahead, energy price forecasting and power market forecasting are expected to become more data-driven and computationally advanced as AI and improved analytical tools allow for faster scenario analysis and larger-scale modeling. However, human judgment is expected to remain important because policy decisions, regulation, geopolitics, and market behavior cannot be fully captured through quantitative models or AI-driven forecasting tools alone.
Overall, the discussion reflects an energy market environment characterized by rising energy market volatility, infrastructure constraints, and increasing interdependence across electricity, natural gas, oil, and policy markets. Energy price forecasting is becoming more complex as markets navigate evolving demand growth, geopolitical risks, infrastructure constraints, and long-term power market uncertainty.
1. What variables drive prices in forecasting models over different time horizons, and what are the most important model inputs? (06:16)
Energy price forecasting models are shaped by different variables depending on the time horizon. Near-term forecasts are heavily influenced by weather, fuel prices, and electricity demand, while long-term power market forecasting depends more on infrastructure buildout, policy assumptions, and future electricity demand growth.
2. What impact are geopolitical risks and trade disruptions having on energy prices and market volatility? (16:48)
Geopolitical disruptions and trade risks are increasing energy market volatility across oil, natural gas, liquefied natural gas (LNG), and power markets. Supply constraints, infrastructure disruptions, and shifting trade flows are affecting energy pricing dynamics and reinforcing the importance of energy security across global energy markets.
3. What role do U.S. domestic politics including subsidies, tariffs, and drilling policy play in energy forecasting models? (20:09)
U.S. domestic policy affects energy price forecasting through subsidies, tariffs, drilling policy, and permitting regulation. Changes in political priorities and energy policy frameworks can influence infrastructure development, fuel supply expectations, project economics, and long-term investment decisions across energy markets.
4. What factors are driving electricity demand growth across power markets? (27:37 / 38:12)
AI-driven electricity demand, electrification, industrial activity, and data center growth are accelerating power demand across electricity markets. Rising demand is increasing pressure on generation capacity, transmission systems, and grid infrastructure across multiple regions.
5. How could electricity markets evolve to manage rising peak demand and infrastructure costs? (31:18)
Electricity markets may increasingly rely on demand response, battery storage, distributed generation, and dynamic pricing structures to manage rising peak demand and infrastructure costs. These approaches are intended to improve grid flexibility and reduce pressure on existing grid infrastructure.
00:00 Opening & Energy Price Forecasting Overview
04:00 Forecasting Methodologies & Market Assumptions
09:00 Geopolitics & Commodity Market Volatility
14:00 AI, Electrification & Data Center Demand Growth
20:00 Power Markets, Renewables & Grid Constraints
27:00 Natural Gas Markets & Liquefied Natural Gas (LNG) Dynamics
33:00 Infrastructure, Transmission & Permitting Challenges
38:00 Scenario Analysis & Forecast Reliability
43:00 Investment Implications & Closing Remarks
Tags
THIS IS NOT AN OFFER OF APOLLO’S INVESTMENT ADVISORY SERVICES AND IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. AN OFFERING IS MADE ONLY BY A PROSPECTUS OR PRIVATE PLACEMENT MEMORANDUM. FOR ADDITIONAL INFORMATION, PLEASE SEE THE LEGAL PAGE OF OUR WEBSITE HERE.
These presentations may not be distributed, transmitted or otherwise communicated to others, in whole or in part, without the express written consent of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”). The information contained in these presentations does not constitute an offer to sell or the solicitation of an offer to buy, any security, product or service, including investment vehicles or strategies managed by Apollo.
Apollo and its affiliates do not provide investment, tax, legal or accounting advice. These presentations are not intended to provide, and should not be relied on for investment, tax, legal or accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. Past performance is not indicative nor a guarantee of future results. There can be no assurance that any trends discussed herein will continue.
Apollo makes no representation or warranty, expressed or implied, with respect to the accuracy, reasonableness, or completeness of any of the statements made during these presentations, including, but not limited to, statements obtained from third parties. Opinions, estimates and projections constitute the current judgment of the speaker as of the date indicated. They do not necessarily reflect the views and opinions of Apollo and are subject to change at any time without notice. Apollo does not have any responsibility to update these presentations to account for such changes. There can be no assurance that any trends discussed during these presentations will continue.
Certain statements made throughout these presentations may be “forward-looking” in nature. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking information. As such, undue reliance should not be placed on such statements. Forward-looking statements may be identified by the use of terminology including, but not limited to, “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.
Investing involves risk, including loss of principal. Alternative investments often are speculative, typically have higher fees than traditional investments, often include a high degree of risk and are appropriate only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time. They may be highly illiquid and can engage in leverage and other speculative practices that may increase volatility and risk of loss.
© 2025 Apollo Global Management. All Rights Reserved.
