• 3 minutes China's aggression is changing the nature of sovereignty.
  • 8 minutes Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 11 minutes Europe gas market -how it started how its going
  • 28 mins Russia, Ukraine and "2022: The Year Ahead"
  • 3 hours January 23rd - Washington D.C. and Brussels - Demonstrations Against Tyranny
  • 3 hours Energy Storage Could Emerge As The Hottest Market Of 2022
  • 2 days Following the Big Money

Low-Cost Oil And Gas May Make U.S. ''Energy Dominant''

The United States is set to become “energy dominant”, boosted to prominence by its low-cost oil and gas supplies as global prices rise in the future, Bank of America said in a presentation on Wednesday.

The shift to renewables will inevitably hike prices for fossil fuels and will keep them volatile—particularly in Asia and Europe. This scenario, according to BofA, will favor low-cost producers and exports such as the United States.

Francisco Blanch, BofA’s managing director of global commodities research, sees the U.S. as having a “good run” in the hydrocarbons market this decade and maybe even the next.

And several other analysts, such as JP Morgan, are calling for those high prices that BofA says will catapult the United States to energy dominance as soon as next year.

JP Morgan analysts have suggested in a new report this week that oil could reach $125 per barrel next year and $150 per barrel in 2023, but largely attributed this oil-price rise to the “mirage” of OPEC+’s spare capacity, which JP Morgan feels is substantially less than the general market consensus of 4.8 million bpd—having in actuality just 2.8 million bpd to spare.

The United States—like OPEC+--has failed to ramp up oil production to pre-pandemic levels. OPEC+ continues to produce 3.8 million bpd less than it did prior to the pandemic, while the United States is still producing 1.6 million bpd less.

Despite the bold predictions regarding high oil prices, crude prices have dropped off significantly in November, shedding 20% on the month, despite the energy crisis in Europe and Asia. Europe’s inroads with the green transition already, which has contributed to the energy shortage as wind power failed to live up to its power expectations with low wind speeds. That shortage—and warnings to blackouts this winter should it prove to be colder than usual—helped to boost crude prices heading into Fall.

Since then, however, crude oil prices have fallen on renewed demand fears stemming from the makings of the next wave of the coronavirus and the new Covid-19 variant, Omicron.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News