It’s no secret that the United States and the world at large are in dire economic straights. As a direct result of the outbreak of COVID-19, 22 million Americans have been forced to file for unemployment. Small and mid-sized businesses are being forced to shutter their doors. Every sector of the economy has been battered by the outbreak of COVID-19, and the subsequent shutdown of the economy.
Oil and gas has perhaps born the worst of the economic downturn. As people shelter in place and the weather warms up, demand for oil and gas has dropped to almost nothing. The result: a gaping $400 billion — that’s with a “B” — hole in the economy. Though oil and gas have taken the biggest hit, no sector of the energy industry has remained immune.
But things are looking up. The world is slowly forcing itself back to normal, and the energy industry is once again dreaming of a more optimistic time. Now, as people begin to look tentatively toward the future, some experts are suggesting that oil and gas is in a prime position for drastic, healthy reformation.
Oil and Gas Demand Isn’t Going Anywhere
At the moment, the demand for oil and gas is so low that the price of a barrel of oil has sunk below thirty dollars. The demand for gas in April was just 5.3 million barrels a day, roughly half the year prior. As the country began to reopen at the end of May, the demand for gas rose to 7.4 million barrels a day. It’s a promising start at the end of a bleak winter.
In fact, some experts suggest that the demand for oil and gas could skyrocket very quickly over the next few months. Consider this: as wonderful as it is to get out and about, several US citizens are still righteously concerned about catching COVID-19. As a result, they will adopt new behaviors to account for that. For example, some believe the demand for gas will increase as fewer people use public transportation. What’s more, millions of Americans will choose to stay at home just as the summer reaches its hottest point. That means more natural gas will be needed to power AC units across the US.
In short, demand for oil and gas is expected to rebound by the end of the year (at the very latest).
Another Rebuilding Era
The pain of the 2014 oil and gas crash is all too fresh in the minds of oil and gas players worldwide. Once more, unforeseen economic happenstance has critically injured a vibrant surging market. Still, it’s tough to keep people from craving energy. As a result, oil and gas is expecting to see not only a return to previous demand but a dramatic increase.
Demand for oil and gas is expected to increase through the 2030s. COVID-19 has done little more than slow it down.