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Written by Daniel Graeber for Industrial Info Resources (Sugar Land,
Texas)
Summary
Commodities markets may be more supportive of natural gas by next year, but U.S. crude oil prices are expected to drop well below the break-even point for shale drillers.
Signs are Good for Natural Gas, Not so Good for Oil
For the U.S., it's the era of natural gas and liquefied natural gas (LNG) exports, while the focus elsewhere in the Americas is on crude oil, recent earnings reports suggest.
The U.S. is the world leader in natural gas and crude oil production, along with exports of LNG. Commodities markets may be more supportive of natural gas by next year, however, as U.S. crude oil prices are expected to fall well below the point at which many shale drillers can make a profit.
Kinder: Gas is Gold
On Wednesday, Richard Kinder, the executive chairman of Kinder Morgan Incorporated (Houston, Texas), said that, from his perspective, this is clearly the era of U.S. global leadership in energy.
"With historic growth in global natural gas demand, a favorable federal regulatory landscape, and strong support from permitting agencies, the outlook for our company is exceptionally promising," Kinder said.
U.S. natural gas markets are in an expansion phase, with both production and exports of LNG on pace for an increase next year. The industry can expect support from market prices, with Henry Hub, the U.S. benchmark for the price of natural gas, on pace for a 14% increase by next year.
Technip Turns to South America for Crude Oil
The same can't be said for the crude oil sector, however. West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, enjoyed a geopolitical risk premium on Thursday from additional sanctions on Russian oil to trade near $62 per barrel. But by next year, WTI is expected to average $48.50 per barrel, well below the point at which many U.S. drillers can make a profit.
Technip Energies (Paris, France) in August secured an engineering contract to deliver six modular and scalable liquefaction trains to the planned Commonwealth LNG export facility in Louisiana, in a deal valued at more than $1.1 billion.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more about Commonwealth LNG--including capacities, investment values and necessary equipment--in a detailed project report.
But in discussing its performance during the third quarter, Technip Energies focused almost exclusively on crude oil opportunities elsewhere in the Americas. Its offshore development contracts reached $2.4 billion during the period, a 4.6% increase from second quarter levels that was driven largely by developments in Guyana.
"This included our seventh award from ExxonMobil in Guyana: the Hammerhead project," said Doug Pferdehirt, the company's chairman and chief executive officer. "TechnipFMC has been awarded all of the operator's subsea production systems in Guyana since the first award in 2017."
Subscribers can learn more about Hammerhead in a detailed project report and plant profile.
Pferdehirt added that offshore projects will be the top target of increased capital investments for his company. That follows a report from the Organization of the Petroleum Exporting Countries (OPEC) that found U.S. offshore will be the only source of any meaningful growth in crude oil production, with shale oil production on pace for a marginal decline by next year.
A separate report from the International Energy Agency (IEA), however, finds that much of the anticipated oil production growth is expected from the U.S., Brazil, Canada, Guyana and Argentina, with the IEA finding output from non-OPEC suppliers at or near all-time highs.
Key Takeaways
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Summary
Commodities markets may be more supportive of natural gas by next year, but U.S. crude oil prices are expected to drop well below the break-even point for shale drillers.
Signs are Good for Natural Gas, Not so Good for Oil
For the U.S., it's the era of natural gas and liquefied natural gas (LNG) exports, while the focus elsewhere in the Americas is on crude oil, recent earnings reports suggest.
The U.S. is the world leader in natural gas and crude oil production, along with exports of LNG. Commodities markets may be more supportive of natural gas by next year, however, as U.S. crude oil prices are expected to fall well below the point at which many shale drillers can make a profit.
Kinder: Gas is Gold
On Wednesday, Richard Kinder, the executive chairman of Kinder Morgan Incorporated (Houston, Texas), said that, from his perspective, this is clearly the era of U.S. global leadership in energy.
"With historic growth in global natural gas demand, a favorable federal regulatory landscape, and strong support from permitting agencies, the outlook for our company is exceptionally promising," Kinder said.
U.S. natural gas markets are in an expansion phase, with both production and exports of LNG on pace for an increase next year. The industry can expect support from market prices, with Henry Hub, the U.S. benchmark for the price of natural gas, on pace for a 14% increase by next year.
Technip Turns to South America for Crude Oil
The same can't be said for the crude oil sector, however. West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, enjoyed a geopolitical risk premium on Thursday from additional sanctions on Russian oil to trade near $62 per barrel. But by next year, WTI is expected to average $48.50 per barrel, well below the point at which many U.S. drillers can make a profit.
Technip Energies (Paris, France) in August secured an engineering contract to deliver six modular and scalable liquefaction trains to the planned Commonwealth LNG export facility in Louisiana, in a deal valued at more than $1.1 billion.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more about Commonwealth LNG--including capacities, investment values and necessary equipment--in a detailed project report.
But in discussing its performance during the third quarter, Technip Energies focused almost exclusively on crude oil opportunities elsewhere in the Americas. Its offshore development contracts reached $2.4 billion during the period, a 4.6% increase from second quarter levels that was driven largely by developments in Guyana.
"This included our seventh award from ExxonMobil in Guyana: the Hammerhead project," said Doug Pferdehirt, the company's chairman and chief executive officer. "TechnipFMC has been awarded all of the operator's subsea production systems in Guyana since the first award in 2017."
Subscribers can learn more about Hammerhead in a detailed project report and plant profile.
Pferdehirt added that offshore projects will be the top target of increased capital investments for his company. That follows a report from the Organization of the Petroleum Exporting Countries (OPEC) that found U.S. offshore will be the only source of any meaningful growth in crude oil production, with shale oil production on pace for a marginal decline by next year.
A separate report from the International Energy Agency (IEA), however, finds that much of the anticipated oil production growth is expected from the U.S., Brazil, Canada, Guyana and Argentina, with the IEA finding output from non-OPEC suppliers at or near all-time highs.
Key Takeaways
- The U.S. continues to enjoy a global advantage in the natural gas market
- U.S. production and exports of LNG are set to grow further in 2026
- The outlook for crude oil looks more promising elsewhere in the Americas
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
