Energy prices climbed significantly in the first quarter of 2022, driven by solid demand and supply-side constraints exacerbated by Russia’s invasion of Ukraine. However, recently, oil and gas prices have retreated from their peaks. Factors, including global recession fears, have led to a steady price decline.
However, according to Bill Smead, Chief Investment Officer at Smead Capital Management, energy prices are likely to rise as a reopening of China’s economy could lead to a spike in energy demand while the supply remains tight. Also, with current supply shortfalls, Goldman Sachs sees potential for higher oil prices. Furthermore, government spending is expected to benefit the energy sector.
