Oil and Gas Trends to Look Out for in 2018

The oil and gas industry outlook for 2018 seems to move in favor of the United States. Under the current Trump administration, regulators have placed policies that allow growth in this sector for upstream as well as the downstream distribution of energy resources.

The industry as a whole is revolutionizing – evolving from emerging technologies, raising commodity prices. The industry trend to look for in 2018 would be the performance of shale gas in reducing energy costs. Also, as markets favor lowering energy prices, the role of natural gas is becoming the dominant energy commodity will also be interesting to watch.

OPEC and the energy market

The Organization of Petroleum Exporting Countries (OPEC) still produces more than 30 million barrels of world oil and the role it will play in the World Energy markets cannot be avoided. On the other hand, the US shale breakeven has lowered from $68/bbl to $50/bbl.

With more and more alternatives pouring into energy markets such as electric cars by Tesla, as well as wind and solar power energy resources, the competitive pricing will play an important role in energy commodity market of the future.

Natural Gas – Energy commodity of the future

Companies in 2018 will focus on digital technologies as well making the supply chain more efficient, eventually lowering costs from upstream all the way to downstream distribution. As the energy market becomes more competitive in 2018, the growth of natural gas will be a strong industry focus; especially in the U.S., where a lot of coal energy is being switched to natural gas.

Although there is an increase in demand for natural gas, this increase in demand has been marred by competitive low-cost energy supplies from regions including the U.S. Natural gas seems to be a strong contender for economic distribution of energy, but the resource is not the ultimate solution in the current scenario. Many of the world’s natural gas resources is in countries without any technologically advanced or adequately established infrastructure and distribution channels.

Digitizing the energy infrastructure

If the demand for energy does not change in the near future, the alternative path to success in the upstream and downstream supply of energy resources would be to digitize many parts of the process. The use of automated technology creates efficiency, in turn reducing the cost of resources being employed in different parts of the supply chain from goods procurement to developing fields.

Domestic and International exports

As mentioned before, the ease in regulatory environment and an investor-focused U.S. administration has allowed tremendous opportunities for U.S. exports in the global markets. In 2017, crude oil exports doubled, and the same phenomena is expected in 2018 as well.

Conclusion

With the change in global environment and advancement in the use of technology in oil and gas industry, the energy market will provide a very competitive playground for the oil exporting countries in 2018. The use of alternate energy commodities such as natural gas and other cost reduction tools such as the use of digitization in energy infrastructure will reduce supplier costs helping countries capture more market in the competitive Energy space.