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High M&A Activity: Strong balance sheets following a sustained period of high oil and gas prices led to record deal-making activity in 2023. We believe this trend will continue as majors optimise their portfolios for the future, and independent operators with opportunistic financial backers capitalise on near-term return opportunities. We believe industry consolidation will continue in the longer term, as financing will become scarcer for small operators without credible decarbonisation plans. Sustained High Oil Prices: Geopolitical tensions in Ukraine and the Middle East as well as OPEC+ supply discipline have kept oil prices relatively high following the post-pandemic rebound, despite a slower-than-expected economic recovery in China. ���������ֳ� believes risks for oil prices are weighted on the downside as ample spare capacity by OPEC+ constrains further price increases and demand growth is moderating. European Gas Prices Stabilise: European gas prices have dropped from the highs of 2022, averaging USD13 per thousand cubic feet (mcf) in 2023 and remaining around USD10/mcf in 2024. ���������ֳ� believes European gas markets will be relatively tight in 2024-2025 with additional liquefied natural gas (LNG) capacities in the US and Qatar from 2026 putting downward pressure on prices.