DUBLIN, May 10, 2016 /PRNewswire/ --
Oil prices rose on Tuesday after wildfire knocked out vast amounts of crude production in Canada. With facilities expected to be shut down for several weeks, it is estimated that some 2.5 million barrels of daily production have been taken off the market. This will alleviate some concerns over a market already brimming with record levels of stored supplies.
According to a report on the global outlook of the oil and gas industry, the decline in oil prices is causing hardship for exploration companies. On the equipment side, all suppliers are under pressure to reduce costs; the oilfield service companies that enjoyed high margins in the recent boom are particularly impacted. There is a shift taking place as emerging markets become the focal point for the global refining industry.
News also broke today that Royal Dutch Shell, ConocoPhillips and other companies had relinquished 2.2 million acres of drilling rights in the Chukchi Sea. After spending an estimated $2.5 billion on drilling rights in the U.S. Arctic waters, the companies are pulling out because crude oil prices have fallen to less than half of their June 2014 levels.
Growing energy demand coupled with maturing onshore oilfields is leading to a requirement for new oil and gas discoveries, according to a report on the drilling services market. The U.S. Arctic waters is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas, but energy companies have been unable to tap these resources. It looks bleak for the market, with the U.S. Interior Department cancelling upcoming lease sales last year.
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