Market Watcher Says Be Prepared for the Unexpected

(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)
In this week’s edition of oil and gas industry hits and misses, one of Rigzone’s regular market watchers looks at current geopolitical trends and warns industry onlookers to be prepared for the unexpected. Read on for more detail.
Rigzone: What were some market expectations that actually occurred during the past week – and which expectations did not?
Frederick J. Lawrence, Conference Speaker and ex-Independent Petroleum Association of America (IPAA) Chief Economist: Continued pressure and volatility on prices due to tight markets, geopolitics starring Russia-Ukraine and storm-related pressure on natural gas. Prices for oil easily broke through $90 and the EIA recently raised its WTI and Brent forecasts by about 11 percent. Natural gas also saw increased upward movement at the early stages of Storm Landon but relaxed once the Texas (and MISO) grids appeared stable and capable of handling the freeze and sustained low temperatures.
Rigzone: What were some market surprises?
Lawrence: Some positive news on Iran negotiations balanced out continued geopolitical stress concerning Russia’s accelerated troop movements around Ukraine. Timing is of the essence as experts consider the ongoing state of negotiations, continued troop movements and the onset of the ‘rasputitsa’ thaw. As always, be prepared for the unexpected. But there are some positive supply notes as well worth mentioning. Continued positive dialogue with Iran could restore around one million barrels per day to the market balance which joins some rather bullish capex projections from some of the larger oil companies in their earnings statements. Global project start-ups projected for 2022-2024 look stronger compared to the 2020-2021 cyclical trough even though ESG and financial caution pressure the mid-longer term outlook. There seems to be rather conflicting views especially regarding 2023-24 pricing based on such tight market balances and large question marks regarding supply and demand, as well as geopolitics. Russia and China seem to be continuing their energy cooperation as their ‘no limits’ diplomacy with a second long-term gas deal between Gazprom and CNPC for 10 billion cubic meters over 25 years with a new pipeline from the Russian Far East.
To contact the author, email andreas.exarheas@rigzone.com
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.
- Energy Services Sector Will Grow To $1 trillion In 2025
- Will A New Iran Nuclear Deal Be Agreed to in 2023?
- Shell Posts Record 2022 Profit
- Maritime Security Report Shows Incident Trends Down YoY
- Winter Storm Mara Update
- New SPR Bill Passes House
- Westwood: Several Macroeconomic Factors Make 2023 Unpredictable
- Keppel O&M To Deliver Guyana's Third FPSO To SBM Offshore
- Big Oil Shareholders Biggest 2022 Winners With Massive Payouts
- ADNOC Signs Deals With 23 Firms Worth $4.6 Billion
- What Bad Habits Should Oil and Gas Jobseekers Avoid?
- Top Headlines: Valaris Employee Reported Missing from Rig
- Big Oil Saw Record $199Bn Profits In 2022 But 2023 Will Be Different
- Biden To Support ConocoPhillips Alaska Oil Project, Defying Greens
- USA Drops 3 Gulf of Mexico Rigs
- USA Oil and Gas Employs Almost 1 Million in 2022
- Shell Makes Host of Company Changes
- Libya Sees More Deals After Eni's $8B Gas Investment
- $1 Trillion Green Investment Matches Fossil Fuels For First Time
- US Could 'Steal' Green Energy Investments From Other Regions
- Valaris Employee Reported Missing from Rig
- Louisiana, Texas To Gain Thousands of Energy Jobs At Start of 2023
- Gasoline and Diesel Prices Expected to Fall
- Is the USA Shale Boom Over?
- Higher Oil Prices Have Not Led to More Exploration
- Shell Finds Gas In Pensacola High-Impact Well Off UK
- Talos Makes Two Commercial Discoveries In Gulf Of Mexico
- Iran Oil Gushes Into Global Market
- Will Oil Hit $100 Per Barrel in 2023?
- Eni, Chevron Make Significant Gas Discovery Off Egypt