Based on a survey by Barclays, investments by oil and gas companies in the US are expected to rise this 2017 due to the quick response of the industry to the recent uptrend in crude prices.
The company reports that, while the global oil and gas industry is still recovering at a sluggish pace, capital spending in oil and gas companies in the country, especially those operating in North America, will surge by 27% this year. According to its projections, bigger exploration and production companies will sharply increase their spending on drilling and completion wells, while the largest international oil firms will raise theirs slowly.
If these predictions are accurate, there will be a continued growth in the country’s oil production, bringing in additional barrels of oil and gas to its market and limiting the probability for crude prices to increase further.
Aside from Barclays, the Energy Information Administration also published a short-term energy outlook that predicts oil production in the country to pick up significantly this year and keep increasing until the end of 2018. Forecasters at Citi also pointed out that exploration and production companies would raise their spending by around 36%, considering that oil prices would stay at their present levels.
In preparation for this upturn, a few exploration and production companies have already set out their plans for this year. These include several shale oil companies trying to cover capital spending from their cash flows and getting funds from external sources.