According to S&P Global Platts Analytics’ newly issued 2022 Energy Outlook, oil and gas supply will expand faster in 2022 than it did in 2021, reaching up with and even surpassing energy demand growth.

While rising demand for oil and gas was the main trend this year, analysts at S&P Global Platts predict that rising supply will be the main narrative in energy markets next year.

According to S&P Global Platts Analytics, rising LNG exports, higher oil and gas production from the U.S. shale patch, and non-OPEC members’ return of investment in supply will not only meet demand next year but also exceed demand, helping to replenish the currently depleted inventory of energy commodities globally.

The recently resurrected fears of new COVID variations, such as Omicron, having a big influence on oil demand, according to the experts, are “likely overblown.” Still, according to S&P Global Platts Analytics, those fears will exacerbate the already high volatility in the global energy markets.

Much of the view for 2022 will be determined by how the first quarter of the year plays out, as well as weather conditions in the northern hemisphere over the winter, according to the analysts.

The globe faces two important geopolitical signposts in oil and gas in Q1 2022, according to S&P Global Platts Analytics: the so-called Iran nuclear deal and the disputed Russia-led gas pipeline Nord Stream 2. According to S&P Global Platts, if those two issues are not resolved early next year, they will continue to have a significant impact on oil and gas prices for the rest of 2022.

Two primary factors will decide gas markets and prices early next year: the winter weather and Russian pipeline gas delivery to Europe. In the case of oil, all analysts, including OPEC+, predict a surplus to emerge in the first quarter of 2022.