2018 Outlook: Survey Reveals Industry’s Outlook on Oil Prices, Jobs
Entering into a new year, the oil and gas industry is hoping to continue pressing forward after 2017 indicated some positive signs of slow progression in activity and employment. Around this time last year, KPMG’s Regina Mayor forecasted there would be job opportunities in data analytics and robotic process automation as well as challenges in attracting the younger generation.
Rigzone recently conducted a global survey to determine respondents’ outlook on the oil and gas industry for 2018, and of 1,000 respondents, overall results seem positive.
The price of Brent crude oil – the benchmark for oil – has been the topic of conversation for oil and gas professionals globally the entire year. With OPEC, Russia and other non-OPEC producers agreeing on the 30th November to extend their oil production restraints through 2018, energy analysts expect a market rebalance in the second half of 2018. This, in turn, could cause oil prices to increase, they said.
Survey respondents shared a positive expectation for oil prices. Forty-six percent of respondents believe the highest crude oil will be priced in 2018 is between US$65 and US$75 per barrel. And just under one-third (31.7 percent) believe the highest oil price will be less than US$65 per barrel.
On the 11th December Brent crude closed at just below US$65 at US$64.69 per barrel – the highest price it’s been since June 2015 – following the shutdown of the Forties Pipeline System, Britain’s biggest oil pipeline.
Another area of continued concern for the industry is whether or not hiring will pick back up significantly – and when. In 2017, employment trends were somewhat slow and steady, with the majority of companies not doing massive hiring or conducting massive layoffs.
Rigzone last reported the number of global layoffs due to the industry downturn at 440,000 in February. Some industry consultants believe the total number of jobs lost to be much higher.
But what about employment opportunities? Which industry sector will be most promising when it comes to jobs in 2018? According to Rigzone’s survey, 46.6 percent of respondents believe the upstream sector will offer the most opportunities. Another chunk of respondents, however, do not share the same optimism. Almost 22 percent believe that none of the sectors will have growth opportunities in 2018. Another 16.6 percent believe downstream will have the most growth opportunities and 15.3 percent believe midstream will.
Overall Industry Sentiment
The morale of energy firms and workers has taken a hit during the industry downturn, that is for sure. But looking ahead, Rigzone’s survey found that 38 percent of respondents described their sentiment as “hopeful” for the industry in 2018.
Still, and not surprisingly, 30 percent of respondents are “concerned” about the industry going forward. Another 24 percent are “optimistic” and 8 percent were “indifferent.”
Summing up, the industry is Hopeful for the best, Concerned about the unknowns, but Optimistic things will get better in 2018.