Energy Prospectus

US energy execs see crude at $84/b by end 2023, nat. gas $5.64/mmBtu - survey. Quantum Commodity Intelligence.

Oil and gas executives operating in the southern oil-producing states of the US expect energy prices to recover from current levels during 2023, according to a survey published by the Federal Reserve Bank of Dallas Thursday. The Dallas Fed collected the price forecasts in its latest energy survey of exploration and production (E&P) and oilfield services (OFS) firms across the Federal Reserve’s three-state Eleventh District, which includes the oil-rich Permian Basin and the Haynesville Shale gas-producing region. On average, respondents expect a WTI oil price of $84/b by year-end 2023, compared to current monthly futures prices ranging from $76/b-$78/b, while responses ranged from $65/b-$160/b.

Survey participants expect a Henry Hub natural gas price of $5.64/mmBtu at year-end versus current 2023 forward contract prices on NYMEX ranging from $3.90-$4.50/mmBtu.

Read more: https://www.qcintel.com/article/us-ener ... 10759.html

MY TAKE: I expect oil & gas prices to go on another Wild Ride in 2023.
> Oil price volatility will be headline driven by opinions on how severe a recession we will have, Covid in China, Russia/Ukraine War, OECD Petroleum Inventories, OPEC+ production quotas, opinions on how much EVs will reduce oil demand, wind & solar, Monkeypox, etc. My forecast is that WTI will average $85/bbl, with a trading in the range of $70 to $120 per barrel.
> On a percentage basis the volatility in natural gas will likely be even more wild. Weather forecasts, actual weather, weekly storage reports, global demand for LNG, infrastructure issues, coal prices, hurricanes, FEAR that we won't be able to refill storage before the next winter, Team Biden's next scheme, etc. My forecast is that HH will average $6.00/MMBtu in 2023, with a trading range of $4.50 to $9.00 per MMBtu. FWIW the 10-day forecast for the U.S. shows more normal temperatures returning to the eastern half of the U.S. by the end of next week.

This is one reason why I believe U.S. oil production will not return to pre-pandemic levels in 2023.

Shale bosses worried about US labor shortages going into 2023. Bloomberg.
US shale executives remain concerned about the outlook for rising costs going into 2023 as they continue to struggle with hiring and retaining workers, according to the Federal Reserve Bank of Dallas. A majority of respondents polled in the bank’s latest quarterly energy survey, which was released Thursday, said they expect to increase capital spending slightly or significantly next year compared with 2022 levels. And while most also see West Texas Intermediate oil at $80 per barrel or higher at the end of next year — levels that are above the current price — underlying inflation and supply chain issues punctuated by labor shortages also make major production hikes unlikely.

MY TAKE: The oil & gas industry needs lots of SKILLED WORKERS. This is a high-tech business and very few young people are pursuing jobs which they have been told will not be needed in "Green New Deal World".

>US energy execs see crude at $84/b by end 2023, nat. gas $5.64/mmBtu - survey. Quantum Commodity Intelligence.

You can buy a futures contract for Dec 2023 for 4.835. If the above forecast is correct, 1 contract will make $8,000. I'm in...

Keep in mind that those forecasts are pure Wild Ass Guess at this point. However, my WAG is that we see much higher gas prices at several points this year. There are lots of variables that impact the gas price.