“Crisis of Oil Supply”
The oil and natural gas sector has for some time suffered a series of calamities most of which have been attributed to the continued drop in oil prices. In the last five years alone, the sector has registered the greatest number of retrenched workers more than any other global industry. There is fear that more retrenchments may be announced in the near future which could see dozens of employees out of employment. Towards the beginning of the year 2017, the sector began to register some improvements. This followed OPEC’s efforts to reduce the supply glut which had characterised the industry for many years. Generally, the oil supply glut could be to blame for the continued drop in oil prices. Despite the efforts made by both the industry’s players and the major oil producing nations, little has changed so far. The price of oil has only recovered by a small margin and still trades around $50 per barrel.
Experts still believe that there is hope for the industry. Since the announcement of the OPEC oil deal which was aimed at bringing the supply glut to a halt, the oil prices have improved significantly. There is even speculation of seeing the prices hit the $60 mark by the beginning of 2018. Whether this will turn out to be a reality still remains subject to debate.
“Limited Supply of Oil in the Market”
Possibilities Of A Rise In Prices Of Oil
The year 2017 has seen the oil and gas sector suffer many blows ranging from crippled growth in earnings and a perpetual increase in the quantity supplied. Whether this is likely to change in the near future is still unknown. Experts have mixed feelings on the subject with some suggesting that more stringent measures have to be put in place to fuel the much-needed rise in the prices of the commodity. But, the rise in the prices of the commodity has to come soon. The industry’s major players have already waited for too long. Without a doubt, they would relish the long-awaited rise in prices. There is also the issue of the margin by which the price will change. The price of oil has remained stuck around $50 for most of the year.
“A rise by a huge margin would push it beyond $60, a development which would calm the nerves of the sector’s players.
“Market Increases Oil Prices”
Indicators Of A Possible Rise In Prices
In order to be anywhere close to predicting the future of the oil prices, it is actually a perfect idea to consider some indicators. Around mid-October, oil prices had registered a rise in prices to settle around $56. A number of major oil futures including Brent Crude and the US West Texas Intermediate futures which registered price rises two days in a row. Such marginal rises in prices may pave way for much larger rises by the beginning of 2018.
Further, the major oil producing nations around the world have continued to reduce their supply of the commodity, a development which is likely to push demand up. According to experts from OPEC, the supply glut will not spill over into 2018 and the demand for the commodity is likely to rise in the process. Therefore, chances of a huge rise in the price of the commodity are high. But, experts still remain uncertain about the whether the commodity’s prices will hit the $60 mark by the beginning of next year.