Will the Energy Market Go from Bust to Boom in 2021?

As the nation (and world) recovers from the Covid pandemic, we look at the top 10 issues that are affecting the energy markets.
AUSTIN, Texas - July 27, 2021 - PRLog -- 1. Could Energy Prices Break New Records As The World's Economy Recovers From Covid?

As of this writing, the July contract price for West Texas Intermediate (WTI) crude oil has broken $70 per barrel, bringing it in line with prices from 2018 – e.g. before the price falls that predated the precipitous cliff edge collapse of oil futures into negative dollar territory last spring during the initial phase of the pandemic.

Will oil prices go higher? Yes, but the question now is by how much and how quickly.

There are still imbalances in the economy – for example, employment is still 7.5 million workers below the pre-pandemic levels, yet many employers are having trouble finding workers. But vaccination rates are going up here in the US, in the UK, and, by summer, in the EU, all of which should help drive up demand.

On the supply side, the upstream oil and gas industry (including the all-important unconventional fracking sector) needs to recover from extensive layoffs, well shutdowns, mergers, and bankruptcies that have taken place over the past two years before it begins firing on all cylinders again.

The Fed is signaling now that we should expect higher prices overall in the coming months. It may even have to raise interest rates this year, and Fed Chair Janet Yellen says we could see inflation rates as high as 3% this year (though she expects it to be a temporary phenomenon).

In this scenario, $100/bbl oil prices may be here quicker than we know it.

2. The Biden Administration Races To Tighten Oil And Gas Industry Regulations Unwound By The Trump Administration

For oil and gas E&P companies, the news out of Washington has to feel like a rollercoaster ride, as regulations loosened by executive orders of the Trump administration have been reversed one by one by the incoming Biden team.

These wide-ranging actions include canceling recent oil and gas lease options, curtailing oil and gas drilling in Alaska, revoking the Keystone XL oil pipeline permit, and seeking to reinstate limits on off-gassing (flaring) methane and other gases at wellheads.

The Biden administration has also pulled back on lawsuits against California and the other states who sought to instate higher mileage and more stringent pollution requirements on new cars and trucks.

Read more...https://formaspace.com/articles/industrial/will-the-energ...

Julia Solodovnikova
Email:***@formaspace.com Email Verified
Tags:Energy Market Trends
Location:Austin - Texas - United States
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse
Formaspace News
Most Viewed
Daily News

Like PRLog?
Click to Share