If recent market evidence is anything to go by, oil and natural gas prices will remain volatile in 2019. However, there is much to suggest that the industry has the potential to overcome short-term challenges despite oversupply risks. For instance, according to Moody’s, both U.S. oil and natural gas benchmarks will see range-bound volatility but the agency expects the medium-term price band for West Texas Intermediate (WTI) crude, the main North American benchmark, to be $50-$70 per barrel, and North American natural gas at Henry Hub to average $2.50-$3.50/MMBtu. Writing to its clients, the rating agency opined while the recent announcement that OPEC and Russia will cut production helps alleviate concerns about oversupply, the pivotal questions in the coming year are whether OPEC and Russia will maintain their production discipline and what might happen in June, when the current agreement expires. Despite oversupply risks oil and gas industry will be on ‘steady footing’ in 2019 (Photo: Angel Navarrete/Bloomberg © Bloomberg 2016) © 2016 Bloomberg Finance LP "Market expectations for continued strong oil demand growth remain in place, despite concerns about slowing demand growth as a result of weaker economic growth, the impact of tariffs and a strong U.S. dollar," […]
