Trade journals that cover the petroleum industry have been abuzz about the month of July, especially the last week. OPEC, Kuwait and the UAE have pledged to cut production in the US, shale drillers have only opened two new rigs a week. Oil prices have been stepping closer to the $50 a barrel level in New York, and futures in London have already crossed this level. It’s the best the industry has seen all year.
Confidence Builds Among Experts
While rises and falls from one week to the next are common, July has been different. Industry experts see a long-term trend shaping up, one of an industry rebalancing, with supply and demand finding equilibrium and prices rising to higher, more sustainable levels.
A number of expert views have contributed to overall confidence and stability in the market. The American Petroleum Institute has noted that the nation’s demand for fuel has risen to its highest levels in a decade, and Goldman Sachs has observed that recent downtrends in stockpile levels mean that there is reason to be optimistic about oil prices, come 2018. The only areas of uncertainty concern the unpredictability of OPEC’s production plans and the possibility of sanctions against Russia.
Oil inventories in the U.S. are now far lower than the levels historically seen. With a hopeful stabilization in oil prices and confidence that prices could head towards $57 a barrel as part of a long-term trend, there has been a good rise in activity seen at rigs over the past year. American drillers are more active than ever, as well. Until the foreseen long-term trend of stability truly bears out, however, there’s considerable stress laid on cost savings.
Learn About Sigma’s Solutions
Advanced technological solutions such as the pulsation control solutions developed by Sigma Drilling Technologies are an important part of this trend. Even as the industry moves towards confidence and hope, cost savings provide an important buffer against short-term fluctuations.
Learn more about innovative pulsation control systems for your drilling operation by contacting Sigma at 281-656-9298 to schedule a free demonstration.
