The election of Donald Trump may have generated a polarized response among the masses while the effect on the US oil and gas industry has been largely positive, to say the least. Recent changes in the US political landscape have been followed by a strong push to do away with many of the regulations that have been restricting the industry, with one of major roadblocks being the drilling restriction on onshore and offshore federal lands. With Donald Trump as the POTUS and lesser restrictions on drilling, most drilling companies are scaling operations to find profitable reservoirs, opening an ocean of opportunities for qualified investors. Continuing on the subject, we give you an overview of the impact of Donald Trump’s election on the US oil and gas industry, and what lies ahead.
2016 Summary
2016 was an eventful year for the US oil and gas industry. The industry witnessed almost $50 billion dollars worth of U.S. upstream merger and acquisition deals through the year. Although the oil and gas industry has many driving factors, such as uncertain prospects for the global economy, managing excessive speculation, and geopolitical dynamics, against all odds, 2017 seems to hold some great potential for high-return investment opportunities. Let’s look at some of the driving forces that will drive investments in the oil and gas industry in 2017.
Driving Forces
Shifting Regulatory Trends
The current political scenario seems to be having a positive effect, especially with regulatory changes expected to abolish various roadblocks in the oil and gas industry. Key regulatory areas such as derivatives oversight, renewable energy tax credits and environmental protection are all expected to benefit from the policies of the Trump government.
Growing Demands
An existing imbalance between the supply and demand of oil and gas, with demand outpacing supply, has resulted in energy companies increasing their drilling and fracking activities to find more reservoirs. All the major companies hope to bridge this gap between the supply and demand as the global demand of energy sources is expected to increase at a rate of almost 2 percent per year.
Technological Advancements
Leading tech manufacturers are introducing better technologies to provide eco-friendly drilling methods to oil and gas companies. These Enhanced Oil Recovery (EOR) technologies enable production at previously untapped or “risky” oil shale reserves while reducing waste footprints on the environment.
What Lies Ahead
The good news is that most projections, including from the World Bank, indicate that oil prices are on a recovery path. For instance, EIA forecasts Brent crude oil prices to average $52 per barrel in 2017, compared with $43 per barrel in 2016, close to 21% upward correction. If you are planning to invest in oil and gas, FIG Tree Capital Ventures can identify promising direct investment opportunities and help you craft a robust investment strategy. To learn more about our energy projects, call 866-304-9194.
