Enverus Intelligence Research, a subsidiary of Enverus, a global energy data analytics and SaaS technology company, released on May 25 a report focusing on its five-year supply, demand and price outlook. The report confirms that nearly three months into the Ukraine war, oil and gas markets remain tight with Brent oil trading well above $100/bbl and Henry Hub gas above $8/MMBtu. This edition of FundamentalEdge dives into the company’s medium-term expectations for supply, demand and price for both commodities as well as risks to our forecasts.
“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 United States 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 U.S. supply infrastructure becomes able to accommodate supply growth sometime next year or demand buckles under the weight of soaring prices.”