The market share of the US oil industry is experiencing a steep downfall amid the outbreak of COVID-19 pandemic. The spread of the virus has imparted threatening impact on the global economy thus the demand of oil in different industries has experiencing a sharp decline which in turn has lower down the cost of the oil and its other derivatives. Since, 2014 the oil production in the US is experiencing an year-on-year growth however, with this COVID-19 pandemic outbreak the growth is expected to get hampered by the declining demand of oil across the globe. Aviation industry is a major end-user industry of the oil industry. The government issued directives related to travel restrictions have made people stay at home to avoid the mass gatherings. Furthermore, the government of the US has also issued temporary closure of schools, universities, production facilities and offices, which in turn is making adverse impact on the demand for crude oil on domestic level. The coronavirus has infected more than 3,80,600 people out of which 16,303 have lost their lives yet. The US is the highly affected country with this COVID-19 outbreak with more than 33,000 cases in the country.
With the rising social awareness the country people are involving themselves in doing self-quarantining to restrict the spread of the virus but with it the halted transportation is lowering the global demand for oil. Further, in lieu of the outbreak of coronavirus in the US, the country also bans airplane operations in most of the affected countries. Apart from travelling, due to the halt of several manufacturing industries in the country which are the end-user of the oil industry is further making a significant impact on the oil industry of the country. Thus, with the rising pressure of the work from home schedule and restricted travelling pattern the oil industry is highly deteriorating in the US.
At this time of the crisis, Saudi Arabia, the major oil exporter across the globe has revealed its plans to increase the crude oil production to 12.3 million barrels per day in April, 2020 after the disagreement on the contract between the OPEC countries and Russia. Russia and Saudi Arabia’s combined decision to produce more volumes of the oil is further anticipated to lower the price of the crude oil from the current level of prices due to supply surplus of the crude oil. With this particularly the US shale-based oil and gas companies are finding it difficult to compete with the other oil producers for a prolonged period under this downfall market scenario.
Chevron Corp., EOG Resources, Inc., ConocoPhillips Corp., Pioneer Natural Resources Co., Marathon Oil Corp., and Anadarko Petroleum Corp. are the major oil producing companies operating in the US oil industry. To make stable demand and supply in the oil industry due to COVID-19, OPEC planned output cut to support oil prices by 1.5 million barrels per day until June. Also, the US government has mad promise to increase the oil prices by filling up of their strategic petroleum reserve. At the time of this crisis the Federal Reserve had also cut the interest rates to nearly zero, however, the oil industry of the US is still exhilarating for a long downturn as the coronavirus pandemic raises the risk of a coming recession.
OMR Global Recently Published Report on:https://www.omrglobal.com/industry-reports/us-oil-industry-market
The report Covers-
- Historical market growth estimation in the US oil industry not accounting COVID-19 pandemic effect
- Deviations in the US oil industry growth rate taking COVID-19 pandemic effect into account
Market Segmentation
By Drilling Method
- Onshore
- Offshore
Companies Profiled
- Anadarko Petroleum Corp.
- Chevron Corp.
- ConocoPhillips Corp.
- Devon Energy Corp.
- EOG Resources, Inc.
- Hess Corp.
- Marathon Oil Corp.
- Occidental Petroleum Corp.
- Pioneer Natural Resources Corp.
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