Before Hurricane Harvey hit the heart of America’s exploration and production industry in Texas, there was considerable devastation and a drop in output expected. While the hurricane did hit inhabited areas, most of the state’s drilling capacity, both offshore and onshore, was spared.
This adds to other encouraging news – the nation’s oil inventories had been falling at remarkable rates before the storm; America tapped into its strategic reserves for the first time in five years. Falling inventories have opened up demand for fresh supplies.
A Trend Seen Elsewhere
News of related trends arrives in OPEC’s September 2017 Monthly Oil Market Report. Not only have estimates of the growth rate of the world’s oil demand been revised upward by 50,000 barrels a day, crude oil production by OPEC member states has fallen by as much as 80,000 barrels a day. A decline of this nature hasn’t been seen in four months.
The declines are attributable to problems that Libya’s oil industry has faced owing to political turmoil, and to outages in Kazakhstan, Mexico, Azerbaijan, the North Sea and even Russia. Uncustomary compliance by Iraq and other OPEC countries to production limits has added to the declines seen.
The bottom line is that inventory declines have sped up and will continue to do so. According to opinions published by the International Energy Agency, prices, already standing 5% higher in August than at any time in the preceding five months, are expected to rise in modest degree.
Exciting Times in the Drilling Business
Raising drilling capacity as soon as possible is an excellent idea at this point, according to Sigma Drilling Technologies, a key producer of high-efficiency pulsation control solutions including pulsation dampeners. Responsiveness is key to the market as it exists today, and E & P companies that invest in advanced drilling equipment give themselves an edge.
Gear up with Sigma Drilling Technologies. Contact us at (281) 656-9298 to schedule a free demonstration.
