Oil Production is Down, Prices are Heading Up

With the current political situation around the world, there is more to watch than the recent election of President-elect Trump. Along with the change in the United States from a Democrat to a Republican in the presidential position, there are plenty of other players in the world that have an effect on oil and gas production. In turn, this can have a major effect on the United States hydraulic fracturing industry and the natural gas that is produced.

Just recently, the Organization of the Petroleum Exporting Countries (OPEC) met in Vienna to discuss possible options to improve the oil industry and oil prices. OPEC managed to end the gathering by signing a deal that will reduce worldwide oil production. This deal, led by Saudi Arabia and Iran, will decrease worldwide production by approximately two percent if non-OPEC countries stick to their side of the agreement.

While two percent may seem like small change on the world scale, production cutbacks like this haven’t been seen since 2008 when oil and gas prices skyrocketed. As Americans, we could be in for a bumpy ride in the near future if a couple of policies don’t change and a few particular industries don’t step up.

One of the most significant industries that will be a major player in fighting off gas and oil price rises is the fracking industry. The United States fracking industry is one of the largest in the world and has helped create more independent energy sources than allowing the U.S. to rely on the Middle East for oil. With the change in position, and the reduction of production in OPEC countries, the United States doesn’t have to feel the pressure if the fracking industry can up production and keep up to make up for the deficit. Some wonder how much the fracking industry may have sugar coated their ability to ramp up production, however, one thing is for sure, they’re going to have to try. From the need for frac tanks to having qualified workers, the only thing stopping the rise is crude oil prices from hitting the U.S. hard is the ability for natural gas to make up the difference in lost barrels of crude oil. Now a barrel of crude oil costs $40 per barrel, but that could quickly shoot up to $60 per barrel in just a few weeks, or over the next few months.

The other contributing factor that may be able to put a stop to the effects of this OPEC deal in the United States is Trump’s push and insistence on an oil self-reliant country. Being able to meet the needs of the population with our own oil supplies, and supplementing with other energy sources as needed, could easily be the difference between gas prices pinching the pockets of many Americans and this change being just a blip on the radar. No matter what, the next few months will be very critical in not just the oil and gas industries, but also for the American fracking industry as well.

If you work for a fracking operation and are in need of frac tanks to hold water or frac fluid, turn to Well Water Solutions for all your needs. Contact us today for more information about our products and services.  

Our Director
Willaim wright

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