Oil and Gas Price Forecast: Top Trends That Will Affect Oil and Gas in 2025

By Finance News On Dec 25, 2024

In 2024, the oil and gas markets were shaped by several significant trends including shifting demand, geopolitical turmoil and rising production.

As the two key oil benchmarks (Brent and West Texas Intermediate) struggled to maintain price gains made throughout the year the natural gas market was able to register a 55 percent increase between January and the end of December.

Starting the year at US$75.90 per barrel Brent Crude prices rallied to a year-to-date high of US$91.13 on April 5, 2024. Values sunk to a year-to-date low of US$69.09 on September 10. By late December prices were holding in the US$72.40 range.

Similarly, WTI started the 12-month period at US$70.49 and moved to a year-to-date high of US$86.60 on April 5. Prices sank to a year-to-date low of US$65.48 in early September. In late December values were sitting at the US$69.10 level.

While both oil benchmarks contracted by year’s end, natural gas made a late rally achieving its year-to-date high of US$3.76 per metric million British thermal units on December 24.

What trends impacted natural gas in 2024?

Although prices were able to register a late year rally, prices remained under pressure for the majority of 2024. Natural gas prices fell to a year-to-date low of US$1.51 in February, shortly after the Biden administration enacted a moratorium on new liquefied natural gas (LNG) projects in the country.

For Mike O’Leary, partner at Hunton Andrews Kurth, the president’s decision added further strain to the oversupplied market.

“The gas prices this year have been really under pressure,” O’Leary told the Investing News Network in a December interview. “We just have so much associated gas with the oil that’s being produced that we just continue to have a glut of natural gas.”

He continued: “And with the moratorium imposed by the administration this year on LNG facilities, it’s just exacerbating that, that that glut, for the time being, until at some point that hopefully the moratorium will be lifted, and we’ll see more LNG facilities under construction.”

Hope that the moratorium would be lifted was further dampened in mid-December when the Department of Energy (DoE) released a study on the environmental and economic impacts of LNG exports, assessing their effects on domestic prices, supply, and greenhouse gas emissions.

The DoE analysis highlights a triple cost increase for US consumers from rising LNG exports: higher domestic natural gas prices, increased electricity costs, and higher prices for goods due to manufacturers passing on elevated energy expenses.

‘Special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day – considering its direct life cycle emissions – would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023,” the report read.

This latest development isn’t the only trend…