Conning ConnText Podcast: Economic Challenges Continue into 2023 as Markets Weigh Concern Over U.S. Fed Moves and Possible Recession
January 26, 2023
A Guardedly Optimistic View of Energy Markets for 2023
HARTFORD, CT – January 26, 2023 —Leading global investment management firm Conning has posted its latest Conning ConnText quarterly podcast, which observes that the economic challenges of 2022 remain prevalent at the start of 2023. While market observers are unsure of next steps regarding U.S. Federal Reserve (Fed) policy and if a recession is in the offing, the podcast also discusses Conning’s guardedly optimistic view of energy markets for the year ahead.
Rich Sega, Conning’s Global Chief Investment Strategist and host of the podcast, said that Fed policy will be of great interest early in the year as concerns grow regarding an economic slowdown. “Money supply is down hard and has been dropping for almost a solid year; the effects are only now beginning to be felt,” Sega said. “Will policy continue to pull the economy down even as prior policy tightening is taking hold?”
Strong economic growth would be a welcome event, Sega said, and affordable energy would be helpful to that end. Marcus McGregor, a director leading Conning’s energy and commodities-related research, said that U.S. oil producers appears set to reach record production levels in 2023 and “we expect production to actually trend higher over the next couple of years.” The U.S. may also see refining capacity return to pre-COVID levels after a significant drop, he added.
A warmer winter, rising stockpiles and slowing global economies have led to some price softening, which has been good for U.S. consumers, McGregor said. As the second half of the year unfolds, greater demand could drive prices upward again especially if China has a stronger recovery than expected. However, he noted, in general he believes prices, as measured by the West Texas Intermediate crude benchmark, should “stay within our $60 to $90 per barrel price range” for the next two years.
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Conning (www.conning.com) is a leading investment management firm with $191 billion in global assets under management as of December 31, 2022.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of December 31, 2022, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.
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