After two years of lowered expectations, there is a cautious optimism in the oil patch for 2017…and beyond.
There is a growing optimism creeping through the oil patch. It’s nearly a palpable feeling. Whether the city is Abu Dhabi, Basra, Calgary, Houston, Omsk or Stavanger, the language is crude and gushing with the belief the O&G sector is ready to boom again and the current pricing cycle of lower longer will give way to a long upward pricing climb.
But in recent years, the oil patch has seen many blooms turn to dust and while the optimism is real, so is the sober reality of the capriciousness of the economic climate.
What’s behind the optimism? There are a number of factors behind the renewed faith in the O&G. Much of that begins with the unexpected November 30, 2016 decision by OPEC (Organization of Petroleum Exporting Nations) to reduce output by 1.2 million b/d (barrels per day)to 32.5 million b/d. It was the first agreement to cut production since 2008. Ironically, the deal was pushed forward by Saudi Arabia, which only two years ago advocated a position of letting the marketplace determine the production/pricing levels.
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