Forum Survey: Execs See High Prices, More Turmoil

Most of the executives attending the Energy Intelligence Forum in London last week indicated that they expect oil prices to remain high through the end of the year, and that the energy impacts of the war in Ukraine will continue to cause economic and political turmoil in Europe and beyond.

The survey was conducted at the Energy Executive of the Year dinner on Oct. 4 and was comprised of four multiple choice questions.

What do you expect will be the price of front-month Brent crude futures on Dec. 31, 2022?

Some 63% of the respondents, or 24 of 38, indicated that they see Brent futures closing out the year at $80-$100 per barrel, with 26% predicting a range of $100-$120/bbl. None indicated that they expect Brent prices to top $120/bbl, while 11% predicted a level below $80.

Those results largely align with the findings of the most recent quarterly energy industry survey by the Dallas Federal Reserve, which polls oil and natural gas executives in Texas, New Mexico and Louisiana. In that survey, conducted in mid-September, over two-thirds of the 159 respondents indicated that they expected US oil price benchmark West Texas Intermediate to finish 2022 in a range of $80-$100/bbl.

However, the same question asked on Twitter by Energy Intelligence in the days preceding the Forum received more varied results. Only about a third of the 485 respondents to the online poll saw Brent prices ending the year in the $80-$100/bbl range. More than a third expected Brent to be higher than $100/bbl by Dec. 31 — including 18% that saw the global benchmark topping $120/bbl by year-end. A further 28% said they expect prices to fall below $80/bbl, a level that Brent has not seen since early January.

Energy Intelligence sees Brent futures averaging about $96/bbl in the fourth quarter this year.

What will be the biggest energy-driven impact of the Ukraine war over the next year?

Just over a third of those in the Forum poll, or 17 of 46 respondents, said they felt that economic and political upheaval in Europe due to high energy costs would be the biggest result from the Ukraine conflict over the next 12 months. A smaller 11% indicated that they expected EU sanctions on Russian oil trade would cause more dysfunction in oil markets, while 15% said high energy prices would cause a deep global recession.

15 respondents, or 33%, felt that all of the above were likely to have impacts over the next year, while two did not expect any of the options to come to fruition.

The results from the executives at the Forum differed significantly from the findings of the online poll on Twitter, in which over half of the 184 respondents chose “all of the above.”

How will the energy crisis of high prices and constrained supplies impact the pace of the energy transition?

Some 38%, or 14 of 37 respondents in the Forum survey, said they expected the energy transition to pick up speed as a result of the crisis, while a similar number — 15, or 41% — felt the impact would be uneven in different regions of the world.

Just two respondents, or 5%, indicated that they felt the transition would be slowed by inflation, supply and other challenges. A slightly larger group of six, or 16%, said they felt the transition would slow for a few years and then speed up.

Those results again varied significantly from the findings of the Twitter poll, in which over half of the 438 respondents felt that the current energy crisis would slow down the energy transition for at least a few years. Just over 28% saw the crisis accelerating the transition.

Energy companies are finding favor in global markets, but will it last? If you had to buy one equity and hold it for the next 10 years, which would it be?

One-third of the Forum survey, or 11 of the 34 respondents, said they would invest in LNG specialists above the other energy options. Close behind, 10 respondents favored European majors in the next decade, while seven chose solar/wind developers.

Only two respondents said they would choose to invest in a US major for the next decade, and only one chose a US shale producer. Large NOCs garnered five votes.

This question was not asked in the Twitter poll.

Leave a Comment

Your email address will not be published. Required fields are marked *