Dr Nakhle explains that while in December we faced a deceleration, driven largely by news around Omicron and its severity as well as the response of governments around the world, markets regained their confidence soon after. Omicron turned out to be much milder than people feared and the restrictions imposed, particularly in Europe and North America, were not as much severe. However, she highlights that we are still not out of the woods. In Asia, we are seeing a deceleration in mobility and the travel, which we are yet to see how it gets translated into downward pressure for the prices.
She further comments on the very bulling crude oil calls of $100 per barrel in the first quarter of 2022, stressing that this kind of expectations often tend to be proven wrong. Of course, you always have the possibility of price spikes but the question is what is the average price for the rest of the year so you can see the forecast. And even in the case you do have price spikes, are they going to last too long?
Dr Nakhle also talks about the price differential seen between the US natural gas benchmark and its European counterpart. While with LNG we are seeing today a more globalised gas market, gas markets are still a regional affair. If you look at North America, you don’t have the same pressure on supplies as you do have in Europe, where you have lots of factors that came to the picture, including geopolitics and energy transition.
Watch the full discussion:
“European gas crunch: Calm before the storm?“, Dr Carole Nakhle, Dec 2021
“Oil markets: What crisis?“, Dr Carole Nakhle, Nov 2021
“An Energy Crisis Like No Other“, Lord Howell, Oct 2021
“Oil prices rise despite the possibility of China withdrawing from its SPR“, Dr Carole Nakhle, Jan 2022
“Did Russia deliberately cause the gas crisis in Europe?“, Dr Carole Nakhle, Jan 2022
“Gas crisis in Europe“, Dr Carole Nakhle, Jan 2022
“Major risks for energy markets in 2022“, Dr Carole Nakhke, Dec 2021