Oil & Gas Price Forecasts

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Oklahoma University Law Energy Center 2018 Energy Sector Outlook:

The regulatory and economic trends in place are very bullish for the energy industry moving into 2018. We expect the rig count to continue to slowly elevate, subject to equipment and personnel limitations, and crude oil prices to average $67 a barrel (WTI) over the year – a roughly 30% increase from 2017. We expect oil prices to firm as we move further into the year, and service costs will increase in the low double digit range after years of stagnation.

With regard to natural gas, we expect natural gas to average roughly $3.00 mmcf. While winter demand is robust, the country has ample supplies and can quickly access those should economics dictate. In 2019, with all the LNG facilities coming on line, in addition to the supplemental exports to Mexico, we expect the natural gas market to firm.

Exports of chemicals and refined products will continue to set records in 2018 and will help keep liquid prices elevated. U.S. refineries will be operating near peak efficiency. Drilling activity will be focused on the Permian Basin and the SCOOP/STACK areas, directed mainly toward crude oil production versus natural gas. Equity share prices should move to reflect commodity price increases.