The new year is off to a positive start for the oil & gas industry. Following an agreement between OPEC, Russia, and other oil producing nations to cut production, prices have been steadily rising since last week. For all of us watching, however, the big question is whether the cuts will continue past the agreement’s expiration date in June.
Some market watchers, such as Moody’s Managing Director for Oil & Gas, Steve Wood, are taking a positive outlook. “Market expectations for continued strong oil demand growth remain in place, despite concerns about slowing demand growth as a result of weaker economic growth, the impact of tariffs and a strong U.S. dollar,” he says. On a related note, QEP Resources of Denver, CO, who recently announced a transition to Permian Basin-exclusive plays, has (as of today) been offered a buyout valued at $2.07 billion by Elliott Management Corp.
Only time will tell what the future of the industry will be, but a few things are certain; US production continues to rise, and OPEC and Russia have a vested interest in stabilizing oil prices.