CRUDE OIL:

-THE US ENERGY ADMINISTRATION REVISES UP OIL PRICE FORECAST FOR 2023. For next year, the agency expects the price of Brent crude to average $95.33 per barrel and WTI to average $89.33 per barrel. The agency forecast that global oil consumption will outpace global oil production IN 2023, which will contribute to increasing oil prices in the second half of the year.

-OPEC PRODUCTION CUTS. OPEC+ agreed in early October to reduce production by 2 million barrels per day from November. The cartel hinted it could impose deeper output cuts to spur a recovery in crude prices.

-RUSSIA EXPECTED TO CUT OIL OUTPUT. Russia may cut oil output by 5%-7% in early 2023, as it responds to price caps on its crude and refined products, and halt sales to the countries that support them.

-BIG BANKS EXPECT PRICE AROUND $100: Goldman Sachs predicts oil at $90 and $95 in Q1 and Q2, respectively. By the end of the year, oil could rise to $105. Morgan Stanley Price Target stands at $110 in 2023. UBS forecasts $107 a barrel. Commerzbank targets $100 a barrel. Bank of America forecasts Oil at $104 a barrel. Deutsche Bank forecasts $100 a barrel in 2023.


NATURAL GAS :

JPMORGAN: NATURAL GAS MARKETS WILL REMAIN TIGHT THROUGH 2023. Imports cuts from Russia due to the sanctions.- European gas imports from Russia fell from 40% in February to 7.5% in October. (Source: Reuters).

U.S. LNG EXPORTERS BOOSTED SHIPMENTS TO EUROPE by more than 137% in the first 11 months of 2022 from the same period in 2021. 70% of the U.S. LNG cargoes are now destined to the European market. (Source: EIA) The EU and the US made an agreement for the U.S. to increase that supply to Europe to 50 bct through 2030.

U.S. INCREASED ITS EXPORT FROM 4.5 bcfd in 2021 to 10.6 bcfd in 2022 and is expecting a further increase to 12.3 bcfd in 2023 when it expects the Freeport export terminal to have resumed operations. (Source: EIA)

With the absence of import from Russia, the EU will likely find it much more difficult to refill storage to adequate levels ahead of the 2023/24 winter and will heavily rely on imports from the U.S. While Gas storage capacity in the EU is currently 89.6 % full, over 40% of stored gas for this winter came from Russia, despite sanctions and conflict.

Goldman Sachs bank said that while the first quarter may be rough due to economic weakness in the US and China, scarcity of raw materials from oil to natural gas and metals will boost prices after that.

Between the year 2000-2022, March tends to be the best performing month for natural gas prices, with an average rise of 8.19%, as countries exhaust their fuel reserves during the winter, and start to replenish them.