Industry standards and new trends
In 2018, global liquid fuel demand topped 100 MMbbl per day. EIA – part of US federal agency responsible for analyzing energy statistics, predicts that the crude oil and other petroleum demand will cross the aforesaid figures. In recent time, US became one of the largest hydrocarbon producers. Now, the question arises whether the US is going to surpass its own demand and produce more quantity of oil every year? The answer is quite straightforward. Yes.
If we closely observe the industry trend especially after the Gulf war in 1991, we’ll capture the fact that, US heavily relied on imports of oil and natural gas due to captive need in the market. Further, this dependence started declining due to shift from import to being energy independent – with aim to boost country’s economy and reshaping global oil market.
The US continued technological advancements to become prominent players within the Oil and Gas industry. The country has achieved significant progress to extract and recover unconventional resources such as shale gas or oil sand even at at the time of recession. Over a decade, the nation has set a milestone for shale gas through research and development along with best industry practices. The outcome of this benchmark reflected surge in oil prices yielding higher profits. Hence, shale companies were contended when the price reached $35. On other hand, price boom over $50 helped these companies to run full-fledged operations independently.
Now, the question is, for how long will the price sustain over $50? If we observe oil price trend especially after 2002, only 11 times the price has dropped varying from $32 to $40. For an instance, fragile OPEC (Organization of the Petroleum Exporting Countries) organization may became diluted due to new trade reforms and continuous push from the US government. This may result decline in crude oil price & gain significant business in West Texas Intermediate (WTI) than Brent. Economists say that this decade has been a game-changer for the hydrocarbon industry due to the adoption of digital and emerging technologies.
The US energy sector has entered a golden era, new fracking techniques has tremendously decreased natural gas prices compared to earlier or other traditional techniques. The new techniques will make shale extraction more viable through efficient horizontal drilling & hydro fracking in near future. While exploring the yield from oil wells, there could be uncertainties in fracking success- which may cause to hit another vendor’s well resulting into law suit.
Various studies are conducted to address above issues, but there is no absolute solution. We realize the depth of the subject and understand the challenges to address the needs of market to the scale of $130 billion. Our cloud-based product can seamlessly integrate various elements into single platform.
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Author: Soumyadeep Bhunia
Soumyadeep is passionate about the energy industry and has experience of 8 years in this field. He works as Senior Business Analyst at EVRY India.