Liberty Energy’s Global Outlook: Surge Amidst Tensions

In the changing landscape of energy dynamics, Liberty Energy Inc., a services firm specialising in energy, anticipates a consistent increase in global demand. According to Chief Executive Chris Wright, the surge is driven by the aspirations of billions seeking affluent lifestyles. Liberty’s strategic perspective highlights the stability of the frac industry as it enters 2024, focusing on maintaining service prices and a right-sized fleet to match lower completion activity.

Shale productivity is at the forefront, driven by engineering and innovation. Liberty points to a growing demand for horsepower due to more intense francs, which ensures well-utilised assets and strengthens service company returns. The company is also adept at managing the complexities of global oil and gas markets, recognising the impact of geopolitics, interest rates, and macroeconomic data on commodity price fluctuations. Although current challenges affect the natural gas markets, Liberty foresees a strong 2025, bolstered by domestic power demand growth and increased LNG exports.

Liberty Energy Inc. has proactively invested in Oklo, a company specialising in small modular nuclear reactors, and Fervo, a provider of advanced geothermal technology. These investments reflect Liberty’s commitment to delivering reliable, affordable energy solutions to meet the growing global energy demands.

Fitch Ratings: Red Sea Conflict Impact on Energy Market

Geopolitical unrest, particularly the ongoing conflict in the Red Sea region, is affecting commodity prices. Fitch Ratings notes that significant price spikes depend on the escalation of disruptions. In 2023, oil shipments in the Red Sea accounted for 12% of the global oil seaborne trade. The conflict has led major producers and shippers to reroute shipments, with supply chains now adapting to longer, alternative routes. Fitch forecasts only a slight tightening of oil and gas supply, not expecting a substantial impact on prices.

Fitch recognises that global oil demand growth might slow down in 2024 due to an economic deceleration and reduced oil consumption in China. Nevertheless, the report underscores the robustness of the global oil supply. OPEC+ countries have over five million barrels per day of spare capacity. If disruptions were to spread to critical oil transport routes, such as the Strait of Hormuz, it could lead to prolonged price increases in the global oil and gas markets.