oil prices

Oil prices have fallen since early October in lockstep with the plunge in 2014. But this time oil companies appear better able to deal with a tough situation.

The oilfield services sector showed steady revenue growth in 2018 thanks, in part, to increased project sanctioning. With the oil price falling $20 in the past 2 months, however, the future may be murkier than expected.

Oil prices appear to have stabilized during the past year, and speakers at the annual Energy and the Economy Conference at the Dallas Federal Reserve Bank say they expect prices to remain level, at least for a little while.

Energy activity has shown solid expansion, but to increase drilling, companies need a higher average oil price compared to last year’s surveys, reflecting a steady increase since 2Q and 4Q in 2017. The ability to find workers and limited pipeline capacity could limit near-term growth.

A fairly stable set of conditions coalesce to make a strong reason to expect the oil price to range between USD 30/bbl to USD 60/bbl for the foreseeable future.

Merger and acquisition activity has been limited since prices started to fall in 2014. But there are signs that M&A activity may be building, and oil company management teams should think about which deal strategies they should pursue.

Continued suppression of global oil prices has questioned the viability of several large and ultradeepwater projects. Article covers Douglas-Westwood’s deepwater expenditure forecast for the 2016–2020 period, and the effect of reduced rig demand on deepwater Capex growth.

In the Price of Oil, Roberto Aguilera and Marian Radetzki predict a dramatic increase in shale oil and other tight oil production from about 4 million BOPD today to as much as 40 million in 2035. This will have a limiting effect on oil price.

Without serious climate policy restrictions, the use of cheaper oil will likely grow and extend its life expectancy throughout the global energy system.

Predictions of a 2016 recovery in the exploration and production (E&P) sector became increasingly rare after 2015 ended with a thud as oil prices sank below USD 40/bbl.