Crude Market Biding Its Time on Tariffs; Large Winter Draw On Stocks and Strong LNG Demand Support Gas Prices

This commentary looks at the factors currently affecting oil and gas prices and Morningstar DBRS' forecasts for 2025, 2026, and 2027.

Key highlights include the following:

-- The double whammy of a tariff-induced global economic slowdown and gradually increasing OPEC+ supply will continue to pressure the oil price in the near term.
-- Morningstar DBRS is reducing its 2025 WTI oil price forecast to $60 per barrel (/bbl) from $65/bbl to reflect a diminished full-year global crude oil supply/demand balance.
-- Morningstar DBRS is trimming its 2025 Alberta Energy Company gas price forecast to CAD 2.50 per thousand cubic feet (/mcf) from CAD 2.75/mcf to reflect year-to-date prices and continued oversupply in the Western Canada Sedimentary Basin.

"Although we view the current economic headwinds facing oil and gas producers as a credit negative, most of our rated issuers are financially and operationally well positioned to weather a middling downturn," said Andrew O'Conor, Senior Vice President of Energy, Utilities, and Natural Resources at Morningstar DBRS. "Therefore, we are currently not contemplating any credit rating actions as a direct result of the imposed and potential tariffs."