With the close of the fiscal first quarter less than three weeks away, energy companies and financial houses are sharpening their pencils in anticipation of the next round of oil price forecasts. The issue is top of mind among the planet’s oil bosses gathering at the CERA Week conference taking place in Houston all week. .The general consensus in nutshell? All over the map, both literally and figuratively. .That’s because much has to do with the war in Ukraine, Russian sanctions, Chinese demand and potential OPEC production moves — either up or down. It all adds up to a level of uncertainty as Calgary’s oil and gas companies prepare to start releasing Q1 financials next month..Oil demand in China could increase by 500-600,000 barrels per day (bpd) in 2023, OPEC secretary Haitham Al Ghais, told the CERA Week confab as its economy struggles to emerge from COVID-19 lockdowns. That’s baked into the cartel’s forecast for a broader 2.3 million bpd demand hike as the global economy regains traction. .If it comes to pass, that would be a recipe for higher prices..The supply side is murkier because nobody knows what the impact of Russian supply caps will have on global markets as the European Union shifts away from its reliance on Muscovite energy. On the one hand, Russian President Vladimir Putin threatens to slash production in response to sanctions — which would cause prices to spike — or alternatively flood the market with cheap oil and crash the market. .Despite a 500,000 bpd production cut, Russian oil output has proved to be “surprisingly resilient” according to British financial giant Barclays, which last week revised its 2023 price deck lower. The bank cut its average forecasts for the Brent and West Texas Intermediate (WTI) benchmarks by $6 and $7 each, to $92 and $87, respectively..Those numbers are still bullish compared to the US government’s Energy Information Agency, which projects Brent to average $83 this year, based on higher Russian production numbers..That sentiment might not be misplaced given events half a world away..Even as the Saudi oil minister was attending the conference in Houston, Russian Foreign Minister Sergei Lavrov was in Riyadh to meet with his Saudi counterpart, Prince Faisal bin Farhan Al Saud, and affirm its ties with the OPEC cartel. Although Russia's not an official member, it has been coordinating with Saudi as part of the so-called OPEC+ alliance..“We have reaffirmed the mutual readiness for further coordination of efforts in OPEC+,” Russian Foreign Minister Sergei Lavrov said, according to Russian state news agency Interfax..“All countries participating in this format are consistently fulfilling their obligations to maintain the proper balance and stability on the global energy market.”.At 10 million bpd, Russia is the world’s third largest oil producer — behind the US and Saudi — accounting for about 10% of global output. Saudi and the US each produce about 12 million bpd and OPEC as a group is about 31 million bpd..Meanwhile US Energy Envoy Amos Hochstein told the CERA conference oil price caps on Russian oil are working to deprive the Putin regime of funds to continue its ‘special military operation’ — outright war — in Ukraine. .Under a deal between G7 countries, Russian seaborne cargoes are capped at $60 a barrel which Hochstein indicated was important to ensure it was sold at a discount, about $17 to West Texas Intermediate Thursday morning. Ukraine President Volodymyr Zelenskyy called that level “weak” and not serious..By comparison, Western Canadian Select was trading at $55 a barrel, or some $22 below world prices. That’s how much it costs to be a price taker, not a price maker in the oil business. But at least we can take some certainty knowing the US treats its enemies better than its friends..This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
With the close of the fiscal first quarter less than three weeks away, energy companies and financial houses are sharpening their pencils in anticipation of the next round of oil price forecasts. The issue is top of mind among the planet’s oil bosses gathering at the CERA Week conference taking place in Houston all week. .The general consensus in nutshell? All over the map, both literally and figuratively. .That’s because much has to do with the war in Ukraine, Russian sanctions, Chinese demand and potential OPEC production moves — either up or down. It all adds up to a level of uncertainty as Calgary’s oil and gas companies prepare to start releasing Q1 financials next month..Oil demand in China could increase by 500-600,000 barrels per day (bpd) in 2023, OPEC secretary Haitham Al Ghais, told the CERA Week confab as its economy struggles to emerge from COVID-19 lockdowns. That’s baked into the cartel’s forecast for a broader 2.3 million bpd demand hike as the global economy regains traction. .If it comes to pass, that would be a recipe for higher prices..The supply side is murkier because nobody knows what the impact of Russian supply caps will have on global markets as the European Union shifts away from its reliance on Muscovite energy. On the one hand, Russian President Vladimir Putin threatens to slash production in response to sanctions — which would cause prices to spike — or alternatively flood the market with cheap oil and crash the market. .Despite a 500,000 bpd production cut, Russian oil output has proved to be “surprisingly resilient” according to British financial giant Barclays, which last week revised its 2023 price deck lower. The bank cut its average forecasts for the Brent and West Texas Intermediate (WTI) benchmarks by $6 and $7 each, to $92 and $87, respectively..Those numbers are still bullish compared to the US government’s Energy Information Agency, which projects Brent to average $83 this year, based on higher Russian production numbers..That sentiment might not be misplaced given events half a world away..Even as the Saudi oil minister was attending the conference in Houston, Russian Foreign Minister Sergei Lavrov was in Riyadh to meet with his Saudi counterpart, Prince Faisal bin Farhan Al Saud, and affirm its ties with the OPEC cartel. Although Russia's not an official member, it has been coordinating with Saudi as part of the so-called OPEC+ alliance..“We have reaffirmed the mutual readiness for further coordination of efforts in OPEC+,” Russian Foreign Minister Sergei Lavrov said, according to Russian state news agency Interfax..“All countries participating in this format are consistently fulfilling their obligations to maintain the proper balance and stability on the global energy market.”.At 10 million bpd, Russia is the world’s third largest oil producer — behind the US and Saudi — accounting for about 10% of global output. Saudi and the US each produce about 12 million bpd and OPEC as a group is about 31 million bpd..Meanwhile US Energy Envoy Amos Hochstein told the CERA conference oil price caps on Russian oil are working to deprive the Putin regime of funds to continue its ‘special military operation’ — outright war — in Ukraine. .Under a deal between G7 countries, Russian seaborne cargoes are capped at $60 a barrel which Hochstein indicated was important to ensure it was sold at a discount, about $17 to West Texas Intermediate Thursday morning. Ukraine President Volodymyr Zelenskyy called that level “weak” and not serious..By comparison, Western Canadian Select was trading at $55 a barrel, or some $22 below world prices. That’s how much it costs to be a price taker, not a price maker in the oil business. But at least we can take some certainty knowing the US treats its enemies better than its friends..This is what the Western Standard is up againstThe Trudeau government is funding lies and propaganda by directly subsidizing the mainstream media. They do this to entrench the powerful Eastern, woke and corrupt interests that dominate the political, social and economic institutions in Canada. Federal authorities are constantly trying to censor us and stop us from publishing the stories that they don’t want you to read. Ottawa may weaponize our taxes and police against us, but we’ve got a powerful ally on our side.You. Free men, and free women. We need you to stand with us and become a member of the Western Standard. Here’s what you will get for your membership:Unlimited access to all articles from the Western Standard, Alberta Report, West Coast Standard, and Saskatchewan Standard, with no paywall. Our daily newsletter delivered to your inbox. .Access to exclusive Member-only WS events.Keep the West’s leading independent media voice strong and free.If you can, please support us with a monthly or annual membership. It takes just a moment to set up, and you will be making a big impact on keeping one the last independent media outlets in Canada free from Ottawa’s corrupting influence.
