Oil and Gas Industry Outlook
The global oil and gas industry generates hundreds of billions of dollars globally each year. The US is the largest producer of natural gas on earth, and one of the biggest producers of oil. There are five important trends to watch.
- Oil demand keeps increasing
The US uses 19 million barrels per day, and China uses 10.5 million barrels per day. Global oil demand reached 100 million barrels per day for the first time in 2018, and is expected to keep increasing for the next two years.
- Oil prices have continued to increase
The average price of a barrel of WTI oil was $71 in April 2019, which is $5 per barrel higher than March, and $7 per barrel more than February, according to the US Energy Information Administration.
- Demand for natural gas grows strongly
Gas is expected to continue to be a primary source of electricity for the foreseeable future. EIA expect the “share of US total utility-scale electricity generation from natural gas-fired power plants to rise from 35% in 2018 to 37% in 2019 and to 38% in 2020”. Many economies, especially developing ones that continue to industrialize, need more natural gas to meet their growing electricity demand. In addition, natural gas is a lower-carbon energy source with lesser emissions. Thus, natural gas is expected to become one of the world’s leading energy sources.
- Sustainability will become the core mission
To reduce the greenhouse effect and slow climate change, energy companies are shifting sustainability from the periphery to the core. More companies are expected to increase their energy technology investments (labor and capital) to deliver renewable and low-carbon energy to consumers.
- More digital technologies are applied in the oil and gas industry
Digital technologies will play an increasingly important role in energy companies’ productivity, efficiency and reliability of decision making. Many complicated factors affect oil and gas prices, so managers need digital technologies to analyze massive information. This is “fueling” the development of artificial intelligence, big data analytics, and blockchain.
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