With 2016 having been one of the most eventful and interesting years for the U.S. domestic oil and natural gas industry in recent memory, 2017 is shaping up to possibly exceed its predecessor on both counts.
The energy world has always been far easier to write about in hindsight than to try to project into the future. In recent years, we’ve seen even some of the industry’s most astute observers end up being spectacularly wrong in their projections: Witness the late Matt Simmons’ long flirtation with “Peak Oil” theory and his assertions the Saudis were about to run out of oil of a decade ago, and the prediction by T. Boone Pickens of $70 oil by the end of 2015 to name just a couple.
Yes, making projections about what will happen in the oil and gas space in the future is most often a fool’s errand, and I figure I’m just the fool to do it. So here we go with some predictions about what 2017 will hold for the U.S. oil and gas industry:
Here’s an easy one: OPEC members will cheat on their production quotas – If we know one enduring characteristic about the Organization of Petroleum Exporting Countries (OPEC), it is that it has always had a problem holding its member countries to their agreed-to production levels. We should expect this most recent deal, finalized in December, to be no different. So, while the agreement will likely help to dry up the excess supply which currently exists on the global market, achieving an ultimate balance between supply and demand will not be an easy task to achieve.