2014-02-13 14:55:01 - Oil & Gas Field Services in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
Operators in the United States Gas Field Services market & oil field services industry primarily provide services to oil and gas extractors, and demand is highly dependent on oil and natural gas prices. During the past five years, divergent US and global energy prices and fluctuations stemming from the recession resulted in volatile year-toyear revenue growth. Nevertheless, revenue has increased overall due to steadily growing global demand for energy. In the five years to 2013, revenue has been rising at an estimated annualized rate of 2.3% to $109.8 billion.
Rising oil and gas prices typically result in increased demand for industry services, especially if prices are expected to remain high. The number of oil and gas drilling contracts rises with prices
because previously unprofitable sites become more attractive to producers. In contrast, demand falls when oil and gas prices are low. In 2009, revenue plummeted 33.9% due to sharp declines in crude oil and natural gas prices. A year later, recovering energy prices fueled revenue growth of 39.2%, even though government offshore drilling regulations increased following the Deepwater Horizon oil spill crisis.
US natural gas prices have plummeted since 2010, falling 14.6% in 2011 and 34.1% in 2012. Domestic crude oil prices were also relatively lower than international prices. As a result, demand for industry services slowed.
This trend is expected to continue through 2013, causing revenue to fall 5.4%. Falling natural gas prices have also negatively affected industry profitability. Firms had to lower prices due to stagnant downstream demand, causing profit to fall from 14.9% of revenue in 2008 to an estimated 12.5% in 2013.
The demand for oil and gas field services is projected to grow over the next five years as the global economy recovers. However, persistently low US natural gas prices will likely constrain revenue growth. Stringent offshore drilling permit regulations in the Gulf Coast will also offset some revenue gains stemming from increased crude oil prices. Nevertheless, US natural gas prices are forecast to increase slowly and US crude oil prices are projected to converge to international prices, resulting in positive revenue growth. In the five years to 2018, industry revenue is forecast to increase at an average annual rate of 1.3% to $117.4 billion.
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