1. Decline in Capital Expenditure (CAPEX) and Shale Production
- In 2016, for the first time in the past 3 decades, end users will cut CAPEX investment for a second year in a row. Decline in CAPEX, along with project decline of US shale oil, will help stabilize crude oil price in the last quarter of 2016.
2. Surplus Production and Concerns on Global Growth
- Record-level production from Saudi Arabia and Russia, and uncertainty over Iran’s commitment to an output freeze negatively impact the price of crude oil. Slowing of economic global growth is another major factor negatively impacting the price.
3. Oil and Gas Continues to Hurt Process Equipment
- Declining oil prices will have significant impact on the market. As oil and gas is the largest end-user segment, this drop is expected to effect the process equipment market.
- North American shale oil and gas producers are the primary market participants effected. This has resulted in significant impact on the process equipment market.
- Latin America, already experiencing political and economic calamity, has also been significantly effected.
- The Middle East, especially Saudi Arabia, is focused on increasing production and hence provides the short-term opportunity for process equipment.
- Asia-Pacific is moderately impacted as major countries in this region are large oil and gas importers.
- Key Findings
3.Oil and Gas Industry - Factors Effecting Price
- Positive Factors
- Negative Factors
- Factors Driving Uncertainty
- Crude Oil Price Expectations - Short-term CAPEX Investments
- Impact on Process Equipment
- The Last Word - 3 Key Takeaways
- Legal Disclaimer