Global | Key themes 2022: Supply response cools price pressure

Brent is currently trading at multi-year highs amid low inventories, robust demand and supply concerns. This follows a sharp recovery in demand last year, which saw a steep decline in inventory through H22021. Demand looks set for another year of above-trend growth, albeit below last year’s high. We expect output growth to accelerate this year – in contrast to 2021 when supply was slower to recover. This will gradually move the oil market into surplus and reduce prices from their current lofty levels by year-end.

What you will learn:

  • Following a year of record price increases, natural gas markets will see further tightness in 2022. Given ongoing geopolitical tensions between Ukraine and Russia and reduced supply of Russian pipeline gas to Europe, prices will remain elevated. 
  • Furthermore, sharp competition with Asian countries for limited LNG supplies means that gas prices will remain high relative to recent years there as well.
  • Metal prices surged last year as demand outstripped the recovery in supply with steel and tin reaching record highs. However, we see metal prices gradually pulling back in 2022 as last year’s robust demand growth eases and metal supply improves. 

Topics: Global, Europe, Coronavirus, Industry, North America, Asia Pacific, Supply chain, Oil and gas, Russia, Supply and demand, Ukraine

Key themes 2022 Supply response cools price pressure - iPad