2018 should be a good year for the US market

2018 should be a good year for the US market

oil gasFor the US oil and gas industry the prospect for 2018 looks bright. Would the American market will be able to strengthen its position? With the increase in drilling would the price collapse we experienced in 2017 will be a repeat this year?

We are expecting an increase in drilling based on drilling permit applications submitted in Texas and across the US during last October and November. It is a sign that upstream companies have budgets for projects.

Investor could have played an influence over corporate to increase returns on their investments. This could be seen in the last quarter of 2017 by decreasing the pace of drilling.

The export limitation agreement between OPEC and Russia has been a success. It strengthened crude price by keeping the market less unstable. The crude price could be higher if those countries keep the same discipline than last year, and US producers do not overrun drilling.

In Texas, dozens of projects are underway to expand takeaway capacity for oil, natural gas and natural liquids gas coming from the Permian Basin pipeline.

The Permian Basin will continue to grow trough 2018, with new drilling projects. As we are moving in 2018 will see the profitability of the producers increase steadily.

The low price and abundant natural gas has now resulted in an amazing $185 billion in new petrochemical plant investments across the US. An estimated 822,000 job creations through 2025 could be the results of expansion of the petrochemical plant.

The exports from the Permian Basin and Eagle Ford Shale will continue to grow through 2018. With the new LNG export terminals at Cameron, LA, Elba Island, GA and Freeport, TX are scheduled to come online in 2018 it will increase the US export by almost 2 billion cubic feet per day.

The Trump administration is playing a role with policy actions to maximize US energy production and export.