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Oil and Gas Outlook for 2022

A Major Increase in Domestic Fracking is Seemingly Inevitable.

It was originally assumed that the oil industry would hit another hard time due to the new covid variant, but this new variant has not impacted the oil and gas industry as much as previously thought.

In fact, the demand for oil and gas is estimated to be even higher throughout 2022.

Oil and Gas fracking in the US slowed down a little from 2020-2021 due to the pandemic as well as some regulatory factors, but the demand was still high. Since then, the US has been compensating by purchasing oil from other countries, including Russia. The war in Ukraine is also likely to increase more fracking on American soil, since purchasing oil from OPEC directly boosts Russia’s economy and weakens Europe’s. Experts are predicting that the President will offer more incentives, and soon, to American frackers(1).

Pair these situations with the Infrastructure Bill being implemented and it seems inevitable that the US will have to utilize more domestic fracking to keep up with the demand and keep oil prices in check throughout 2022 and 2023.

Right before Covid in January of 2019, the U.S., domestic crude oil production was 12.29 million barrels per day. It was 11.28 million in 2020, 11.2 million in 2021 and is estimated to be 11.97 million in 2022 and 12.60 in 2023(2).

On top of this increasing demand, the price of oil has soared. In 2020, the average cost of WTI crude oil was $39.17/barrel. It was originally estimated that in 2022 prices will be on average $79.35/barrel. However, WTI crude oil has already reached $104.22/barrel early on in 2022 and is estimated to increase more(3,5).

In the week ending with Jan 19th, 2022, the US reached 725 active oil rigs. That's the highest the number has been since the start of the pandemic and it’s likely to increase even more due to the high demand and high price of oil and the war in Ukraine(4).

This information supports the theory that the Oil and Gas industry is going to continue to grow throughout 2022 and beyond. NAE is taking this information into consideration and preparing for the growing demand by stocking up on OWP motors and pump jack control panel packages for our distributors.

Your customers will be looking for motors and motors controls for new oil well pumps, or replacements for their current oil well pumps. NAE offers Oil Well Pump (OWP) motors ranging from 2 hp - 150 hp with an Open Drip Proof (ODP) enclosure or a Totally Enclosed Fan Cooled (TEFC) enclosure. Our ODP models are available in 1200 rpm, and our TEFC models are available in both 900 and 1200 rpm.

View our full line of OWP motors at this link.
View our full line of Pump Jack VFD Panels at this link.

NAE stocks motor and motor control inventory in multiple warehouses across the US. We provide some of the fastest quotes in the industry and can ship catalog items in as little as 24-hours. Contact our team today for any quote or information you may need.
sales@naemotors.com or (800) 884-0404

All the data cited in this article was taken from the noted source on February 28, 2022. This data may be updated by the original source at their convenience, and the changes may not be reflected in this article.

North American Electric, Inc. is a wholesale supplier of electric motors, controls and shaft mount gear reducers. We offer high-quality products, competitive pricing and same-day shipping for in-stock items. NAE is committed to making motors and motor controls easy for our distributors.

Sources:

    1. Smith, K. W. (2022, February 24). Fracking is a powerful weapon against Russia. BloombergQuint. Retrieved February 28, 2022, from https://www.bloombergquint.com/gadfly/war-in-ukraine-u-s-fracking-is-a-powerful-weapon-against-russia
    2. U.S. Energy Information Administration - EIA - independent statistics and analysis. Short-Term Energy Outlook - U.S. Energy Information Administration (EIA). (n.d.). Retrieved February 22, 2022, from https://www.eia.gov/outlooks/steo/report/us_oil.php
    3. U.S. Energy Information Administration - EIA - independent statistics and analysis. Short-Term Energy Outlook - U.S. Energy Information Administration (EIA). (n.d.). Retrieved February 22, 2022, from https://www.eia.gov/outlooks/steo/report/prices.php
    4. Evans, B. (2022, January 20). US oil, gas rig counts continue to climb across major shale basins in 2022. S&P Global Platts. Retrieved February 22, 2022, from https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/012022-us-oil-gas-rig-counts-continue-to-climb-across-major-shale-basins-in-2022
    5. Evans, B. (2022, January 20). US oil, gas rig counts continue to climb across major shale basins in 2022. S&P Global Platts. Retrieved February 22, 2022, from https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/012022-us-oil-gas-rig-counts-continue-to-climb-across-major-shale-basins-in-2022