Oil and Gas Market Opportunities After COVID-19

The oil and gas industry is down but not out. We look at new opportunities for the energy companies in a post Covid-19 world.
 
AUSTIN, Texas - Oct. 15, 2020 - PRLog -- The third global oil price collapse in 13 years has put the oil and gas industry on the back foot. But the energy industry has recovered before – by restructuring and taking advantage of new opportunities.

Take a closer look at what the energy market may look like in the post-Covid-19 era.

Covid-19 Drives Down World-Wide Demand For Hydrocarbons

Boom and bust cycles have bedeviled the oil and gas industry since the beginning.

Seasoned workers who've experienced downturns before know the drill (pardon the pun) – it's a time for belt-tightening, cost-cutting, restructuring, and industry consolidation – until the good times come back again.

But this time may be different.

Unlike the most recent oil price crash in 2014 – 2016, the Covid-19 pandemic has led to a precipitous drop in demand for hydrocarbon products that rivals the Great Depression of the 1930s.

Demand from nearly every sector that uses oil and gas is down.

Automotive Transportation Demand

The economic shutdowns in the second and third quarters of this year drove down gasoline usage dramatically, as workers stayed at home and avoided commuting trips.

Airline Transportation Demand

Airlines have been operating on skeleton schedules during much of the pandemic as demand for air travel fell off a cliff. Travel restrictions to Canada, Europe, New Zealand, and Australia have compounded the drop in demand.

Electric Generation Demand

On many days during 2020, wind and solar generation have overtaken conventional fossil fuel electricity production. Working from home has balanced out consumer demand, but slowdowns in industrial production during the height of the pandemic shutdown have curtailed energy demand.

Petrochemical Demand (Plastics, Fertilizers, Fabrics, Construction Materials, Etc.)

Demand for petrochemicals (including plastics, fertilizers, fabrics, construction materials, etc.) is down due to reduced industrial activity during the height of the economic shutdown, but compared to other sectors is showing signs of recovery.

Economists are downbeat on the prospect of a quick recovery.

For example, analysts at the World Economic Forum don't expect demand for petroleum products to rebound until 2022 (mainly due to the aviation industry slump), while other consultants worry that 2019 may have been the peak year of oil demand for the foreseeable future.

OPEC Price War Amplifies Impact On US Oil And Gas Industry

Things were oh so different just a few years ago.

The US had finally achieved the unthinkable; we had achieved energy independence for the first time in over 50 years.

Read more...https://formaspace.com/articles/industry-news/oil-and-gas...

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Tags:Covid-19 Effect
Industry:Energy
Location:Austin - Texas - United States
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