How Did I Do Last Year?
Oil and Gas Predictions for 2024. But before we get there, let’s see how I did for 2023? What did I get right, and what did I get wrong?
1. Peak people – I think I nailed that. World population growth is slowing.
2. Major conflict – Unfortunately I correctly predicted the Russia-Ukraine war and its impact on oil/gas prices.
3. Birth of the mega majors – I nailed the Exxon and Chevron acquisitions making them much bigger than Shell and BP.
4. Carbon capture scaling up – I correctly predicted this becoming a real business.
5. Anti-renewable movement – The growth of groups like Just Stop Pissing People Off show the rise of anti-renewable sentiments.
I also correctly predicted the global energy shortage, slow Shale growth, offshore oil/gas boom, and record industry year. My 2023 predictions were 90% accurate – much higher than my usual 74% average. Now I will admit a lot of that is luck, and you can go here if you want to check out my past predictions: 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Pricing for 2024
Now, before we get into my actual Oil and Gas Predictions for 2024, let me get into my pricing predictions for 2024. I think Brett will average $96 a barrel, WTI will average $91 a barrel, natural gas to go for $3.30 per per million British thermal unit.
Now remember, those are my averages for the year. I do expect crude to hit over $100 in 2024 and then come back and settle down. Like I said, these numbers are my average.
Oil and Gas Predictions for 2024
See You in Court
Number one, see you in court. It will become socially acceptable for the oil and gas companies affected by environmental activists to sue them. Because the environmental activists are interfering with oil and gas operations, making things more costly and unfortunately more dangerous. I think society is finally going to be okay with the oil and gas industry turning around and suing these activists. And this will change the financial model of these activist organizations, hopefully which will tamper down with some of their intrusive and dangerous protesting and interfering with the oil and gas industry.
Natural Gas Infrastructure will Boom
Number two prediction for 2024. Natural gas infrastructure will boom. It’s going to take off on a rocket ride straight up 2024 and will continue to grow for the next couple of decades. The driver basically is the promise of renewables has been disappointing, and the world needs more energy. So natural gas makes the most sense and consumers and politicians are finally starting to see that. So another one of my Oil and Gas Predictions for 2024.
ExxonMobil will Go Private
Then number three, people who think I’m crazy here. ExxonMobil is going to go private. If ExxonMobil does go private, it’s going to go free management for having to deal with activist shareholders who don’t understand the oil and gas industry at all and just pulls Exxon back. This will also allow ExxonMobil to make operational changes without triggering government investigations or having to answer to the board. So this can make ExxonMobil much more nimble. And it’s kind of funny to have those two words in the same sentence, ExxonMobil and nimble. We’ll see if I’m right about this one.
Higher Interest Rates
Unfortunately, interest rates will get worse. I believe interest rates will start going up right after the election, and this is going to affect a lot of the large, heavy, enormous capex investment projects around the world. Just another one of my Oil and Gas Predictions for 2024.
Peak Electric Cars
Number five, peak electric cars. So, I’ve been watching electrification of vehicles for a long time. I love electric vehicles, they have their fit, but what I see going on right now is the early adopters have bought electric vehicles. Electric vehicles are still for the world’s wealthy, no matter what anybody else says. And the common people are not buying them like they thought. You’re seeing all the electric vehicle manufacturers, including companies like Ford and GM, backing off from their manufacturing because they see the same thing I see.
Now what I think is going to happen because of this is the companies that are investing into electrical vehicle infrastructure, think of rechargers, aren’t going to invest the money they thought they were going to invest, which is going to limit the number of charging stations. And the number one reason people don’t buy electric vehicles, at least here and in Europe, is range anxiety. So, with less charging stations, there’s going to be less motivation for people to buy it. I think a lot of the government subsidies that were pushed in electric vehicles are going to run out in 2024. So, I think we’ve hit peak electric car sales. This might an unexpected Oil and Gas predictions for 2024.
Then, number six, oilfield service bonanza. This is the beginning of a multi-year oilfield service and equipment boom. The DUC inventories are almost near zero. Capital is finally available for OFS companies. Supply chain issues are still here and it’s directly affecting the operators and hydrocarbon demand will continue to increase. This is going to move the negotiation leverage away from operators and back to the service companies and will be a boom year for oilfield service companies.
The oil and gas industry is learning how to market itself as not an energy business, but a molecule industry. And when you start talking about molecules and the hydrocarbon molecules and how valuable they are to mankind and how modern life is impossible without those hydrocarbon molecules, people stop and listen. So, I think you can see the oil and gas industry start to rebrand itself as a molecular business, which I think is an awesome thing.
ESG is Toast
Number eight, ESG is toast. In fact, I believe ESG is in the tank so bad that our ESG podcasts we are going to rename. What started off as a cool buzzword has been pushed so hard by the investors, environmental activists that now it’s having a negative connotation, and nobody likes to hear the word ESG. So, I think ESG as a buzzword is just gone or it has a negative connotation.
Growth of Shale
Then number nine, shale growth. Finally, I think the shale fields here in the US and around the world are getting ready to explode in growth because we need a quick supply of oil, hydrocarbons and natural gas. And the best way to do it quickly is with shale. Now the reason it didn’t boom in 2023 was capital constraints, constraints on supply chain, lack of labor, and uncertainty around government politics. And I think some of that uncertainty is going to be removed. So I think you can see the shale industry explode growth in 2024. So another one of my Oil and Gas Predictions for 2024.
Final Oil and Gas Predictions for 2024
Then number 10, oilfield pride is back baby! I think this is the rebirth of the importance of the oil and gas industry, the importance of oil and gas workers, and all the companies are going to come back together and be proud of their workers and this industry, just like it was in the past.
So there you go, my 10 Oil and Gas predictions for 2024. If you like this, do me a favor and share with your friends and colleagues. And if you have something to say, if you don’t agree with me, or if you’d like to add some content, just comment on this post. I would love to hear your feedback!