Oil prices could spike again by the beginning of 2023, says one analyst.
"Domestically, whether it's oil or it's gas, these companies have very very limited incremental capacity at this time," Truist Securities Managing Director of Energy Research Neal Dingmann told Yahoo Finance Live.
U.S natural gas prices rallied on Monday to new 14-year highs over reserve concerns and the energy crisis in Europe. Oil prices declined during the session amid worries of a global slowdown and the prospects of a nuclear deal with Iran, which would translate into more crude entering the market.
Dingmann believes oil could fall to about $80 per barrel this year, before jumping to $110 in early next year.
"We're seeing the same thing from OPEC+. All these areas have very very little incremental capacity which makes for me the chance for a spike, whether that be for gas or oil very very possible by early next year," said Dingmann.
Oil futures came off the session lows after Saudi energy minister Prince Abdulaziz bin Salman Al Saud said OPEC+ may be forced to cut production due to a disconnect of fundamentals in the oil market.
West Texas Intermediate crude (CL=F) had been down more than 4% during todays session but came well off the lows to settle 54 cents lower at $90.23/barrel. Brent crude (BZ=F) futures fell 44 cents to settle at $96.28.
Ines is a markets reporter covering equities. Follow her on Twitter at @ines_ferre