Over the last few years, a slump in oil prices has reduced profitability for many U.S. companies and has led to fewer employment opportunities in the industry at large. Recent developments, however, have resulted in the potential for increased profitability for companies in this vital sector of the economy. Careful evaluation of leads and prospects can provide a sound basis for expansion in the current economic climate. Here are some of the underlying reasons for the 2017 boom in the oil industry.
OPEC Ends the Price War
In November 2016, OPEC announced that it would be cutting back significantly on the supply of oil it had been releasing to the world market. This followed two years of what amounted to flooding the market with oil in an effort to compete with U.S. companies extracting oil reserves from shale formations in the Bakken and elsewhere. By reducing the amount of oil produced and sold by OPEC nations, this move allowed prices to rise to a more reasonable level for businesses in Texas and across the United States.
Oil Prices Top $50 a Barrel
Most economic experts point to the $50-per-barrel price point as a touchstone for the oil industry. When prices fall much below that, profitability tumbles and jobs are lost. The recent move by OPEC has allowed oil prices to normalize at over that $50 mark, allowing many companies to enjoy increased profitability and to expand their operations in Texas and other parts of the U.S.
Renewed Interest in the Permian Basin
While the Bakken Formation has attracted the lion’s share of attention over the last few years, recent interest in the Permian Basin is fueling added jobs and increased activity in the state of Texas. Improved methods for oil and gas reserves evaluation and enhanced production techniques are allowing companies to achieve higher profits and increased viability in the modern energy marketplace. Improved training can also provide support for assessing exploration and production opportunities in the Permian Basin and elsewhere in the Lone Star State.
The professionals at Rose & Associates can provide the expert software, training and consulting services needed to help oil companies assess potential drilling sites for maximum profitability. From risk analysis to play-based exploration methods, we can deliver the most effective solutions for all your drilling needs. Our integrated approach allows you to enjoy the most comprehensive array of services in the oil and gas exploration risk assessment field. Call us today at 713-528-8422. We look forward to helping you make the most of the expected boom in the oil industry.