The convergence of geopolitical tensions and wars, prolonged OPEC+ production cuts and stronger than expected YTD global consumption has supported the price of crude oil thus far in 2024. Here are some key forecast highlights:

— We are increasing our 2024 WTI oil price forecast to $75/bbl from $65/bbl to reflect actual year-to-date pricing, a more favorable full-year global liquids supply/demand balance, and a greater risk premium related to geopolitical tensions relative to our prior forecast.
— We are reducing our 2024 New York Mercantile Exchange natural gas price to $2.50/mcf from $3.50/mcf to reflect actual YTD pricing and the larger-than-expected surplus of North American gas.
— We expect the U.S. natural gas supply/demand balance to gradually tighten as low prices discourage new production and, simultaneously, incentivize new demand through 2024.
— Given current excessive gas storage, it will require a robust change in market conditions for the market to enter the 2024–25 winter with inventory at an average or below-average level.

“Looking ahead, we forecast the recent rise in crude price to stimulate non-OPEC+ production growth and for global demand to moderate as expectations for an economic stimulus from rate cuts fade, tending to cap further price gains,” said Andrew O’Conor, Vice President, Corporate Ratings, Energy & Natural Resources. “Additionally, North American and European gas markets are likely to remain soft through mid-year as a result of excessive U.S. and European gas storage inventories.”