Recession Fears Weigh Bullish Oil Fundamentals Down, Higher Natural Gas Prices Needed

EIR extends oil and gas fundamental to the end of decade

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS platform, has released its latest quarterly FundamentalEdge report focused on global drivers for oil and gas prices to 2030, the five-year oil and gas supply and demand outlook, as well as price forecasts.

“Current prices are weighed down by recession fears despite bullish oil fundamentals. We anticipate the anxiety around the possibility of extreme recessionary conditions to fade and oil prices to appreciate into triple digits in the back half of 2023,” said Al Salazar, senior vice president at EIR.

“Following $3-4/MMBtu pricing in 2024-25 we expect higher natural gas prices are needed to incent the considerable amount of natural gas needed to feed LNG facilities slated to come online mid-decade,” Salazar added.

Key takeaways from the report:

• India’s growing oil demand offsets the weaker demand seen in the U.S. Y/Y. Strong oil demand from India and China is expected to drive demand growth through 2023.
• LNG is the primary source of natural gas demand growth through the decade. More than 10 Bcf/d of LNG demand forecast to come online by 2030. There is significant commercial momentum, and EIR only sees upside to its LNG demand forecast.
• U.S. crude production forecast to grow to 12.9 MMbbl/d by the end of 2023, with growth slowing to 0.2-0.3 MMbb/d every year after before plateauing in 2028.
• L48 dry gas production forecast to grow to 101 Bcf/d by the end of 2023.  Lowered completion activity is expected to persist through 2024 keeping production growth limited until it is needed to grow for the LNG demand coming online mid-decade.

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About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser.