Image of financial district in London

Commodity Update (February, 2023)

February 21, 2023
Market Updates

Commodity Update (February, 2023)

Déjà Vu

Those of a certain vintage, and keen students of the oil & gas sector, will know that the early 90s was not a good place to be for those aspiring to enter the oil and gas engineering profession.

The oil was largely in single digits and new technologies were introduced as “disruptive,” that would render the oil business obsolete by 2010.

This was coupled with a period of underinvestment in people, exploration and development. The prevailing environment meant it was easy to levy punitive taxes on the sector, without having to work about the consequences.  

What followed was the supercycle driven by a supply side squeeze, where supply was projected to run short and the manpower didn’t exist to rectify the situation quickly enough.

And so we are in the same situation today, only this time, it will be a super-supercycle. Such has been the underinvestment and tax burden placed on the sector, especially in western countries, that underinvestment will continue, creating the prospect that the oil could easily reach $200/bbl within 3 years, and gas prices average those highs experienced in the summer of 2022.

This is predominantly a political problem, which means that like the period 1995 – 2008, it will get worse for the consumer before it get better.

To get an Excel spreadsheet of February's Forward Probability Curves, contact Oil & Gas Advisors here.


You might also like

2024 02 Commodity Update2024 02 Commodity Update

Market Updates

2024 02 Commodity Update

February 2024 Forward 3 Month Oil & Gas CalendarFebruary 2024 Forward 3 Month Oil & Gas Calendar

Market Updates

February 2024 Forward 3 Month Oil & Gas Calendar

1Q 2023 Oil & Gas Calendar1Q 2023 Oil & Gas Calendar

Market Updates

1Q 2023 Oil & Gas Calendar

From the author

Join OGA's Publications Mailing List

Thank you! Please confirm you subscription via the email we have just sent you.
Oops! Something went wrong while submitting the form.

© 2024 Oil & Gas Advisors Limited
Website by Rugby Web Design