Credit rating agency DBRS Morningstar is predicting that 2023 will be another turbulent year for oil and gas, with a projected drop in prices over the next year or two.
Oil and gas prices went on a wild ride in 2022—with a large part of the volatility driven by the war in Ukraine, the subsequent disruption in Russian oil and natural gas exports, and pandemic recovery. Prices peaked in the summer, but slumped by the end of the year, ending the year more or less where they began a year earlier.
DBRS Morningstar foresees many of the same factors that affected prices in 2022 contributing to continued price volatility in 2023, with the magnitude of an anticipated global economic slowdown a key factor. Oil could slump considerably, tipping the market into oversupply and exerting significant pressure on oil prices.
That could be tempered by low levels of refined products and crude oil inventories within OECD countries. Adding to weaker demand concerns are China’s ongoing challenges in tackling a resurgence of COVID cases and the potential for another global wave of infection.
The province saw a major turnaround in its fiscal forecast in 2022 largely due to skyrocketing oil prices. DBRS Morningstar is projecting lower oil prices for 2023 and 2024, which could have an impact on provincial revenue in the year ahead.
