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Robert Rapier

Robert Rapier

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How Accurate Were 2023 Energy Predictions?

  • Robert Rapier's energy predictions for 2023 turned out to be largely correct.
  • Based on weekly and monthly numbers from the EIA, in mid-December a new U.S. oil production record was set.
  • Rising interest rates began to negatively impact solar projects this year, and solar growth has disappointed.

At the beginning of each year, I make several predictions about the energy sector. You can see those predictions and read the context in Energy Sector Predictions For 2023.

There are still a few days left in 2023, but there is enough available information to gauge the accuracy of these predictions.

As always, I provided predictions that were specific and measurable. Following each of the five predictions below, I discuss what actually happened in 2023 and conclude whether the prediction was right or wrong.

1. The daily average price of WTI in 2023 will be between $83/bbl and $88/bbl.

The spot price of West Texas Intermediate on December 19, 2023 was $73.44 per barrel (bbl). That’s not far from where we started the year ($76.87/bbl). There was volatility during the year, but nothing like we saw in 2022.

The average price of WTI for the year (through December 19, 2022) was $77.83/bbl, which was a bit less than I expected. Prices rose as high as $93.67, and WTI spent most of August through October above $80. The low price for 2023 was $66.61.

So, this was a miss, but only $5.17/bbl below the bottom range of my prediction.

2. Total U.S. oil production will again rise and set a new annual production record.

This is probably the biggest story of the year in the oil and gas sector. Based on weekly and monthly numbers from the EIA, in mid-December a new oil production record was set. (See my article “U.S. Producers Break Annual Oil Production Record”). In fact, data provider S&P Global Commodity Insights noted in a recent press release that the U.S. is currently producing more oil than any other country in history.

So, this prediction was completely correct. Related: Motorcycles Lead the EV Revolution in Asia and Africa

3. The average natural gas price will be at least 25% lower than it was in 2022.

Russia’s invasion of Ukraine in 2022 significantly disrupted the energy markets. As Europe grappled to fill a shortfall of Russian natural gas — and U.S. producers exported as much as they could — natural gas prices averaged $6.45/MMBtu last year.

I felt like the natural gas markets would settle down significantly in 2023. That did happen. Natural gas prices in 2023 (through December 19, 2023) averaged $2.53/MMBtu and were far less volatile than in 2022. That’s a decline of 61% since last year.

Thus, the prediction was correct, but pretty conservative in hindsight.

4. For the first time in three years, the energy sector will not be the top performing S&P 500 sector.

The energy sector was on fire in 2021 and 2022, returning 55% in 2021 and 66% in 2022. I didn’t expect that the energy sector could do that three years in a row, and it did not. Year-to-date, the energy sector — as measured by the Energy Select Sector SPDR Fund (XLEXLE) — is only up 1%, compared to a 25% return for the S&P 500. That makes energy the third worst performing sector of the year (but still the best-performing sector over the past three years).

This prediction was correct.

5. The Invesco Solar ETF (TAN) will return at least 20%.

This was a repeat of a prediction I made last year, and we saw a similar pattern this year. Shares got off to a quick start in January, rising 14% early in the year. Shares were in positive territory as late as July.

But rising interest rates began to negatively impact solar projects, and solar companies began to warn of slowing growth. The bottom fell out of the sector, as shares plummeted in the second half of the year. Solar companies have bounced since last week after the Federal Reserve announced that interest rate cuts were coming in 2024, but as of this writing TAN is down nearly 27% on the year.

So, like last year this one was completely wrong, a victim of rising interest rates.


I got three out of five completely right this year, I wasn’t that far off on my average oil price prediction, but I had a significant miss on the solar ETF prediction.

As always, I will provide new predictions in January.

By Robert Rapier

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  • George Doolittle on December 26 2023 said:
    Despite noting a truly awesome amount of traffic Christmas Day travel South Carolina to New York I still maintain my oil price target per barrel of $1.00 one US Dollar. A failure of just one airline alone would devastate oil demand upon the North American market let alone moving from kerosene to methane powered rocket launch. In the meantime long $slb Slumberger and $vlo Valero with Shell Energy on pace to book incredible top and bottom line growth for 2024.

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