Present State of the Oil and the Power Supply Industries


Continuously plummeting global crude prices have on one hand further intensified the unpredictability of the political and economic affairs worldwide. And on the other, the abysmally low prices which show no signs of surging upwards have put question marks on the oil and gas industry’s stability in the future. There are numerous factors impinging on the future and the markets of this industry including production glut from the North American shale rocks, ISIS crisis, steep extraction costs in North Sea, and energy policy of US.

Excessive pumping of shale oil by US brought down oil prices spelling disaster for the OPEC countries. To make matters worse, demand for oil has subsided on a worldwide basis as the Chinese and Russian economies are going through a recessionary phase. Saudi Arabia, the most vocal endorser of maintaining the current level of output will undoubtedly be hit hard in the near future but as of now is fighting it out buttressed by $750 billion forex reserves. Other OPEC members are already feeling the pinch. The oil and gas industry is going through its worst crisis since the seventies of the last cent and it seems unlikely that the prices are going to top $100 per barrel anytime soon.

The energy or power generation sector is sitting on the cusp of a change as numerous critical factors and emerging trends are influencing the industry’s future. The private companies and Public Private Partnership (PPP) programs are playing a key role in shaping the future prospects of the energy industry. Governments in most countries is assuming the role of a regulator rather than trying to dominate the power sector.

Introduction of new power generation mechanisms and technologies have made it possible to light up more homes without a significant increase in the production cost per unit. Renewable sources for generating power are also being increasingly tapped into.



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