News Release

Latest FundamentalEdge Report Refreshes US Oil Supply Outlook

byEnverus

Calgary, Alberta (February 8, 2022) — Enverus Intelligence Research, a part of Enverus, the leading global energy data analytics and SaaS technology company, has released its latest FundamentalEdge report containing its five-year supply, demand and price outline. The report discusses geopolitical risk and shortfalls from major oil-producing countries that pushed WTI prices above $80/bbl even as the Omicron wave and continued supply chain challenges stifled demand. This quarter’s FundamentalEdge refreshes Enverus Intelligence Research’s near- and mid-term outlook on supply, demand, price dynamics and where we expect bottlenecks to form.

“U.S. supply growth should weigh down both commodity prices through 2022, but the timing for this correction depends on geopolitics for oil and weather for natural gas. The added supply will allow a global build in stockpiles through the first half of the year,” said Farzin Mou, lead author and vice president at Enverus Intelligence Research.

Jen Snyder, co-author, managing director and head of North America Macro Intelligence Research, added, “The strength along the NYMEX gas curve will allow producers to add enough supply to catch up with a 100 Bcf/d market, but the strength does not indicate the potential for an immediately bigger market and stronger prices.”

Key takeaways from the 2022 U.S. Oil Supply Outlook:

  • U.S. oil and gas production growth accelerates in 2022 above ~900 Mbbl/d and ~4 Bcf/d exit-to-exit. Supply chain headwinds defer some of this growth until 2H22 as the rig count rises modestly, peaking at ~660 in late 1Q22 from ~640 today. For both commodities, we expect this strong U.S. production growth to bring prices down relative to current strip levels, although geopolitical tensions and OPEC outages present upside risk to Brent and WTI. As prices weaken and base declines accelerate, U.S. production growth decelerates in 2023, to ~300 Mbbl/d and ~1 Bcf/d, and rig counts moderate to ~560.
  • Robust North American supply growth along with seasonal demand weakening should trigger global crude and product inventories build in 1H22. This build pulls oil prices into the mid-$70s Brent in 1H22. We believe OPEC will manage supply to maintain a ~$70/bbl Brent price floor for the medium term – $5/bbl higher than our previous outlook accounting for inflationary pressures and supply instability. If prices fall below that level for a sustained period, we expect the cartel will manage production to maintain price in the mid-$70s for the medium term.
  • The strength in global gas markets firms up medium-term demand for North American gas — facilities will run close to nameplate capacity. However, the lack of FIDs in 2020-21 combined with the long development time for some 2018-19 FIDs mean that North American LNG capacity additions total only 1 Bcf/d over the next two years. This stall in new trains, combined with supply growth in 2022 and stronger oil prices, brings Henry Hub prices down sharply over the next six months, to the mid-$3/MMBtu range, and then to ~$3/MMBtu in 2023-24.

Download Preview

Members of the media should contact Jon Haubert to schedule an interview with one of Enverus Intelligence Research’s expert analysts.

About Enverus
Enverus is the leading energy SaaS company delivering highly-technical insights and predictive/prescriptive analytics that empower customers to make decisions that increase profit. Enverus’ innovative technologies drive production and investment strategies, enable best practices for energy and commodity trading and risk management, and reduce costs through automated processes across critical business functions. Enverus is a strategic partner to more than 6,000 customers in 50 countries. Learn more at Enverus.com

About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters.  Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser.

Picture of Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Related News

Enverus Press Release - Surfing Europe’s green wave
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS and generative AI company, has released new research that evaluates Europe's clean hydrogen landscape, analyzing how policies and incentives drive adoption and comparing industry activity to European...

Enverus Press Release - Operational efficiencies are driving cost excellence in North America’s onshore drilling
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS and generative AI company, has released new research that analyzes which oil and gas plays show the greatest rate of increase in drilling speeds and whether well...

Enverus_Press_Release_Permian_Black_Box_Press_Release_Thumbnail
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS and generative AI company, has released its forecasts of natural gas pipeline capacity, constraints and basis in the Permian basin.

Enverus News Release - Manuj Nikhanj named Enverus CEO
News Release
ByEnverus

AUSTIN, Texas (May 29, 2024) — Enverus, the most trusted energy-dedicated SaaS and generative AI company, today announced the promotion of Manuj Nikhanj to the position of CEO, effective July 1, 2024. Nikhanj, who currently serves as Enverus’ president, will...

Enverus Press Release - Enverus EVOLVE - Creating the future of energy
News Release
ByEnverus

Following its EVOLVE 2024 conference, Enverus, the leading generative AI and energy-dedicated SaaS company, announced that it was releasing complimentary access to its new Enverus Instant Analyst™ technology to its Oil & Gas Research (OGR) and Energy Transition Research (ETR)...

Enverus Press Release - Load impact imminent: Data center growth at the mercy of power supply constraints
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted generative AI and energy-dedicated SaaS company, has released a collection of research focused on expected growth in data center capacity and associated power demand.

Enverus Intelligence Research (EIR) News Release - Electrifying the Permian
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted generative AI and energy-dedicated SaaS company, has released a report that quantifies the potential electrification of oil and gas assets in the Permian Basin based on operators' emissions reduction...

Enverus Intelligence Research Press Release - 2024 races to a record start with $51B in upstream M&A
News Release
ByEnverus

Enverus Intelligence Research (EIR), a subsidiary of Enverus, the most trusted generative AI and energy-dedicated SaaS company, is releasing its summary of 1Q24 upstream M&A activity. Following last year’s blockbuster $192 billion in U.S. upstream consolidation, 1Q24 would be on...

Enverus Media Advisory-Press Release - EIR’s Andy McConn testifies before Congress on navigating Gulf of Mexico’s offshore challenges
News Release
ByEnverus

Enverus, the leading generative AI and energy-dedicated SaaS company, announced today that Andy McConn, director and head of Commercial Intelligence at Enverus Intelligence Research (EIR), will testify before the U.S. House of Representatives Natural Resources Subcommittee on Energy and Mineral...

Find Out How Enverus Can Help Your Business

Subscribe to the Energy Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Get Started

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert