“Unseasonably warm weather, record high supply and delays to the Freeport LNG restart inflated our end-of-winter natural gas storage estimate. This higher storage projection worsens the oversupply already expected for midyear, pushing our summer price forecast down by as much as US$1/million Btu from previous outlooks,” said Bill Farren-Price, Director of EIR.
Meanwhile, oil prices are expected to rise on tighter balances in the year ahead. “We expect rising oil demand in the second half of 2023 to spark inventory draws and higher prices, with a price call for 4Q an estimated US$20 - 30/bbl above the current forward strip,” Farren-Price added.
Key takeaways from the report:
- Bullish oil price outlook is driven by anaemic supply growth and moderate projected demand.
- The Permian Basin will drive the most global oil supply growth, however, EIR expect supply will struggle to offset Russian losses and OPEC will backstop with fresh cuts if Brent prices fall below US$70/bbl.
- Gas balances have a different story as EIR forecast sub-US$3 NYMEX in 2023 supported by record warm winter weather and strong US gas supply.
