The recovery in oil markets have legs, or are emerging risks

To grease, gas, and chemicals executives as a part of Deloitte’s recent annual survey.

We found that confidence during recovery is indeed returning with
expectations for increased economic process, commodity
prices, and investment—all of which were more positive than
the previous year’s survey. And indeed, market indicators seem
to support this view, with the US and the global economy showing
strong growth, energy demand increasing at above-average
levels, and, within the oil sector particularly, risks providing
persisting from a couple of key exporting countries. So, are the
good times returning?

With reference to the general economic picture, things at
the present appears healthy—unemployment is low, business
investment has picked up, and costs are stable. These positive
fundamentals, combined with the extra stimulus from the
recent tax cuts and better government spending could continue
to support growth within the near term of around 2.5 to three percent.

Even with the tariffs currently in situ. But what happens when
the impact from the stimulus begins to wane over subsequent
couple years—and if interest rates still rise, dampening
both investment and consumer demand? What if the present
tariffs remain in situ or are even expanded? during this case, a
period of readjustment is feasible as consumers face higher
prices for traded goods and corporations see higher costs of doing
business thanks to tariffs on key materials like steel, and also
disrupted supply chains. The energy sector seems particularly
vulnerable here, with its ongoing needs for specialized steel for
pipelines, refineries, and chemical plants.

Energy The Conversation

Irrespective of near-term uncertainty, the 2019 energy
the conversation is predicted to increasingly include long-term issues.
Sustainability is not any longer a distinct segment issue for energy companies.
It is moving to the middle of strategy and investment decisions.
Major oil companies are investing in renewable energy; natural
gas producers, shippers as well as consumers are increasing their
focus on mitigating methane emissions; and chemical producers
are ramping up their efforts to seek out solutions to plastic waste,
through recycling and the use of the latest materials and processes.

Some countries also are stepping up efforts to scale back the
environmental and carbon footprints of their energy and
industrial sectors, with China, especially, taking major steps
to close down polluting factories as well as a shift towards cleaner
energy. Moreover, technology isn’t standing still—the scope
and pace of growth for low-carbon energy as well as autonomous and
electric vehicles, energy efficiency, and distributed energy
is becoming not just a subject for futurologists, but the attention of
decision-making throughout the energy and chemicals
value chains.

error: Content is protected !!