The oil and gas industry is an important indicator of the health of the economy as a whole. Right now, the energy industry in the US and around the world is looking strong for 2020. Recent events in the Middle East are unlikely to have significant effects on pricing for energy products. The most important trend is that the market will remain stable. Both supply and demand are expected to remain healthy. However, there are also plenty of changes coming to the energy industry.
One trend that’s expected to accelerate is consolidation within the energy industry. Put simply, big companies will continue to get bigger. Mergers and acquisitions will be on the upswing. Several large and mid-sized companies have already experienced this. An example of this, WPX Energy’s acquisition of Felix Energy, was a $2.5 billion transaction. Mergers have included Superior Energy Services and Alice Oilfield Service coming together to form Forbes Energy Services. It’s expected that smaller and less healthy companies will continue to be snapped up or subsumed into larger operations.
It’s anticipated that the price of oil will be fairly consistent throughout 2020. The price per barrel of oil is projected to stay at a healthy, stable range. Apart from small pops now and again, $60 is expected to There’s plenty of oil and gas in the marketplace. No shortages are expected. At the same time, it’s expected that the number of oil rigs will remain stable. Production is not projected to go up significantly. The exception to this is the production of shale oil. The only challenge to that form of production might come late in the year, should a less business-friendly president be elected.
In terms of the US exports market, LNG is expected to continue growing. This product is a great way for natural gas to be transported. Typically, it’s re-gasified after it’s delivered to a new market and used normally. Thanks in part to the growth of LNG, the US actually became a net exporter of oil and gas for the first time in 70 years. This is great news for the energy market in the US. It’s also great from a national security perspective, as hopefully, the US can lessen involvement in Middle Eastern affairs.