Continued price volatility for oil and gas

“We see a tangible risk that oil markets will become volatile again later this year and into 2023 when the stock releases end. The release of oil from the Strategic Petroleum Reserve buys time for producers in the US to push harder and for Iran nuclear diplomacy to bear fruit,” said Bill Farren-Price, Lead Report Author and Director of Enverus Intelligence Research.

Al Salazar, Co-Author of the report and Senior Vice President of Enverus Intelligence Research, added, “Neither LNG tightness nor a limited capacity to switch power generation from gas to coal seem likely to change quickly in the near term. This in turn implies that prices are likely to remain elevated until US supply infrastructure becomes able to accommodate supply growth sometime next year or demand buckles under the weight of soaring prices.”

Key takeaways from the report:

• The sharp rally in Henry Hub gas prices has exceeded all early year price forecasts and reflects strong LNG demand as Europe faces up to Russian supply risks as well as limitations for gas-to-coal switching in the US power generation sector.
• Enverus Intelligence Research has nearly halved its early 2022 demand growth expectation for oil to 1.65 million bbl/d and see further headwinds from rising interest rates and a marked slowdown in the Chinese economy as the country battles a new COVID-19 outbreak in major industrial and population centres.

Read the article online at: https://www.worldpipelines.com/special-reports/25052022/continued-price-volatility-for-oil-and-gas/