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Oil and Gas Industry Analysis: Q1 2025
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Its chief financial officer Sinead Gorman added that Shell had paid $13bn in taxes globally in 2022. BP and Shell invest some of the billions they make from oil and gas into renewable power such as solar and wind farms, and charging stations for electric cars. After the invasion of Ukraine, the government faced calls to introduce an extra „windfall tax“ on energy company profits to help pay for soaring energy bills. Big oil companies made their record profits even after paying billions to governments around the world.
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US LNG exports averaged 12.1 bcfd in 2024, largely flat with the 2023 level. However, the US is expected to export 13.7 bcfd of LNG in 2025, a 15% increase from 2024, thanks to stronger demand from Asia and Europe. Driven by record low natural gas prices in early 2024, production in oil profit the Haynesville and Appalachia regions decreased as producers curtailed output until market conditions improved. In 2024, marketed gas production in the Haynesville decreased by 9% to 15 bcfd, while production in the Appalachia region fell by 1.6% to 35.3 bcfd.
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If this scenario were to start playing out, we will likely have to revisit our outlook,” Lakos-Bujas added. “Overall, as 2025 progresses, there exists the potential for a convergence trade, given extreme relative positioning, valuations and price divergences across regions. However, more clarity is first needed on global trade policies and the U.S. inflation dynamic — that the latter keeps moving in the right direction,” Lakos-Bujas said. Morgan Research’s baseline scenario for 2025 is one that sees global growth still remaining strong. U.S. exceptionalism is expected to bolster the U.S. dollar and buoy U.S. risky assets, but the outlook appears more mixed for Treasuries. J.P. Morgan Research is broadly constructive on credit, anticipating modest changes in high-grade spreads, but remains cautious on EM fixed income.
PCE inflation rate by circa 0.75 to 1.5 percentage points during October 2020-June 2022. Prices of petroleum products typically move together over time and all of these prices respond to movements in crude oil spot prices (see Figure 3), though often with a lag. As refinery utilization increases, operating costs tend to rise and stronger product demand allows refiners to pass-on a greater proportion of these costs (see IEA, Oil Monthly Report, July 2005). Investors can gain more direct exposure to the price of oil through an exchange-traded fund (ETF) or exchange-traded note (ETN), which typically invests in oil futures contracts rather than energy stocks.
“Although underbuilding has been evident over the last decade, the long-term housing shortage is less clear. Immigration has boosted population growth, driving demand, while vacancy rates point to potential supply constraints,” said John Sim, head of Securitized Products Research at J.P. In 2024, the global expansion proved resilient despite elevated inflation limiting central banks’ scope for rate cuts. Morgan Research’s 2025 baseline forecast incorporates an extension of this high-for-long rate environment.
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The information and communications and professional services sectors could also see muted growth if firms cut back on discretionary spending, such as IT and marketing. Against this backdrop, the growth of outward-oriented sectors in Singapore is expected to slow over the course of the year. In the US, for example, GDP growth is likely to come in slightly better than projected in April, given the 90-day truce in the trade war with China, although growth is still expected to slow for the rest of 2025. In particular, growth in the manufacturing and wholesale trade sectors was likely to have been partly supported by front-loading activities ahead of anticipated tariff hikes by the United States. On a quarter-on-quarter seasonally adjusted basis, the Singapore economy contracted by 0.6 per cent, better than the prediction of a 0.8 per cent contraction, but reversing from a 0.5 per cent growth in the previous quarter. Analyze the market sentiments & identify the trend reversal for strategic decisions.
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By region, total oil inventories in the US, excluding the Strategic Petroleum Reserve (SPR), reached 1.24 billion bbl in mid-December, with commercial crude and Cushing inventories both at near 5-year lows. In Europe, Middle distillates industry inventories stayed higher than 5-year averages for 2024, pointing to a well-supplied market.OPEC+ production cuts have contributed to global oil inventory withdrawals in second-half 2024. However, continued supply growth outside of OPEC+ will lead to an average inventory build for the entire 2025, putting downward pressure on crude oil prices. The difference between oil market demand and supply from non-OPEC sources is often referred to as the call on OPEC because OPEC members maintain the world’s entire spare crude oil production capacity.
In addition, the outlook for U.S. equities and gold is bullish, but bearish on oil and base metals. Oil trading offers significant opportunities but requires careful preparation and ongoing education. Success in this market demands a thorough understanding of technical and fundamental factors and disciplined risk management. While primarily used by industrial buyers and sellers, spot prices influence other oil trading instruments.