Despite potential economic turmoil on the horizon, we continue to see an elevated commodity price market as we near the last quarter of 2022. This is most evident in the natural gas market, which remains in contango and has seen significant spot market gains as a result of the energy crisis in Europe. With winter months not too far away, significant upward pricing pressure (above the cyclicality of this commodity) is expected as global demand for natural gas rises and with no end in sight to the war between Russia and Ukraine.

Despite early concerns around ESG investment agendas impacting capacity for the oil and gas industry, we have generally seen ample volume for favorable risks and an improved pricing environment. Many companies have used this time in the elevated commodity pricing environment to improve free cash flow, decrease debt, invest in ESG initiatives, and originating stock buyback programs and better hedging contracts. These activities have not gone unnoticed by carriers. Additionally, in a time when many industries are slowing in activity and looking to slow growth further in the face of a global recession, activity in the oil and gas industry remains strong.