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According to the Secretary General of the International Energy Forum, oil prices are expected to increase in the latter half of the year due to supply struggling to meet rising demand. While oil demand quickly rebounded to pre-Covid levels, supply is having a harder time catching up. The fear of a potential recession is currently the only factor moderating prices.
Joseph McMonigle, the Secretary General, stated that serious supply issues are anticipated for the second half of the year, leading to a response in prices. He attributes the surge in oil prices to the growing demand from China and India, with both countries expected to contribute an additional 2 million barrels a day of demand in the coming months.
When asked if oil prices could reach $100 per barrel again, McMonigle acknowledged that prices are already at $80 and could potentially rise further. He emphasized that declining inventory levels will signal an uptick in demand, prompting prices to react accordingly.
McMonigle expressed confidence in OPEC+ taking action to increase supply if a significant supply-demand imbalance occurs. However, he warned against complacency, stating that more investment in renewable energy is necessary to ensure energy security and a smooth transition in the future.
He also discussed the liquefied natural gas market and attributed the stability in Europe's energy market to a fortunate warmer winter in 2022. He stressed the importance of continued pursuit of the energy transition and the need for public support, as connecting high energy prices and volatility to climate policies could risk losing public backing. McMonigle highlighted the necessity of closely monitoring energy prices and volatility to maintain public engagement in the energy transition.
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