Longtime oil industry executive Charles Reed Cagle believes that oil prices will stay strong in 2023. Though prices did decline in 2022, they rallied in the last few weeks of the year. There are multiple factors that suggest oil prices could continue to increase well into 2023. As an industry expert, Charles Reed Cagle is well-placed to give an informed opinion on the forecast for oil prices in 2023.
Read on to learn more about Charles Reed Cagle’s opinion on the prices of oil in 2023.
Oil Prices Declined in 2022
While oil prices fluctuated in 2022, they declined overall. Charles Reed Cagle points to the policies of the Chinese government as the biggest factor in this decline. China is still under a very strict zero-COVID policy. This has lead to a significant decrease in demand for oil in the country. As China is the world’s biggest market for oil, this depressed oil prices globally. However, these conditions are not expected to continue in 2023.
Multiple Factors Suggest Oil Prices Could Increase In 2023
China’s Zero-COVID Policy is Expected to End
Perhaps the single biggest factor that points to an increase in oil prices is the impending end of China’s strict COVID policies. Most experts believe these policies will end in 2023. This will result in an immediate and significant increase in demand for oil in China. As China as a huge market, this would likely be enough to support oil prices. However, there are two contributing factors that will help oil prices to rise in 2023.
Charles Reed Cagle and other experts agree that there is systemic underinvestment in oil. Specifically, there is a significant underinvestment in the structural supply side of the industry. As more investors see this opportunity and invest in oil, oil prices will come up.
Western Sanctions On Russian Oil
Another important factor in oil prices rising is the continued set of sanctions on Russian oil. Many Western governments, including the United States, have placed strict sanctions on Russian oil. This has lead to a less oil coming into Western markets. However, most Western nations have lifted strict COVID restrictions. This means that demand is high while supply is still relatively low. As the sanctions on Russian oil seem unlikely to end any time soon, this situation could contribute to the increase in oil prices in 2023.
Learn More About Charles Reed Cagle’s Work
Charles Reed Cagle gained his expertise on the oil industry through over 30 years of professional experience. He started a successful oil company and now works as a consultant for oil and natural gas clients in the United States. Charles Reed Cagle has also worked successfully in the gold mining and landscape industries. To learn more about Charles Reed Cagle, visit his website.