Oil & Gas Industry Optimistic Despite Low Crude Prices

No matter how many times I attend “the big show”, the scale of the exhibition space and the sophistication of some of the booths is still impressive. This year, when I wasn’t working our booth, I spent time walking the floor gazing at model ships, thick ropes over 1 ft. in diameter, valves that I could nearly drive a car through, and even a 16 passenger executive helicopter.

I didn’t even visit all of the buildings.

It was a pleasure to meet and speak with industry professionals from around the world, and to learn about what they do to keep the industry moving forward.

We had a lot of interest in our hammer union pressure transducers that are gaining popularity among frackers and drillers, as well as our other sensors including heavy duty pressure transducers, ultrasonic level sensors, and magnetic float level transmitters. Our customers have had great success with these instruments in the oilfield due to their reliability and stamina.

Not surprisingly, a hot topic of conversation that often came up in our discussions was the recent slowdown in the upstream business sector due to the fall in crude prices.

Since the price started dropping in the latter months of 2014 over 120,000 people have been laid off and 60% of the oil rigs shut down. The industry has seen better days.

However, despite the disappointing industry conditions, there was plenty of optimism for the future. Professionals previously bogged down trying to put out fires are now free to focus on projects that can improve efficiencies and innovate. Many predict that tight oil break-even points are going to fall as the cost of hydraulic fracturing decreases.

For example, one of our clients who specializes in water re-use on rigs is experiencing an upswing in business as drilling companies look for creative ways to save money.

As oilfield companies innovate to improve efficiency there are already signs that some business could be coming back. The price of crude has bumped up nearly 40% since the lows in March – approaching profitability for drillers.

Ultimately, it is anyone’s guess as to where crude oil prices are headed. It is difficult to predict future economic conditions for oil as unforeseen geo-political events can play such a large factor. But one thing is certain, this industry is cyclical and it takes brains and guts to ride out the highs and lows.

We hope to see you next year at OTC 2016.

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