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The price of US oil has dropped to a level not seen since 1999, as demand dries up and storage runs out.

The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, dropped 14% to $15.65 in Asia trading on April 20.

The oil market has come under intense pressure during the coronavirus pandemic with a huge slump in demand.

US storage facilities are now struggling to cope with the glut of oil, weakening prices further.

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The oil industry has been struggling with both tumbling demand and in-fighting among producers about reducing output.

Earlier this month, OPEC members and its allies finally agreed a record deal to slash global output by about 10%. The deal was the largest cut in oil production ever to have been agreed.

However, analysts said the cuts were not big enough to make a difference.

Meanwhile, concern continues to mount that storage facilities in the US will run out of capacity, with stockpiles at Cushing, the main delivery point in the US for oil, rising almost 50% since the start of March, according to ANZ Bank.

“We hold some hope for a recovery later this year,” the bank said in its research note.

The drop was also driven by a technicality of the global oil market. Oil is traded on its future price and May futures contracts are due to expire on April 21. Traders will be keen to offload those holdings to avoid having to take delivery of the oil and incurring storage costs.

Brent oil, the benchmark used by Europe and the rest of the world, was slightly weaker, down 0.8% to $27.87 a barrel.

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More than 4 billion metric tonnes of oil is produced annually. But as big as the oil and gas industry is, there are still significant factors affecting its success in 2019.

Here are 5 of the biggest trends set to shape the future of the oil and gas industry this year.

Oil Supply

The oil industry relies on the supply of oil from the world’s oil-rich exporters. Fluctuations in this supply can affect oil prices. And oil prices affect the standing of companies in the oil and gas industries.

For example, fluctuations in supply from the Permian Basin have reshaped the oil industry worldwide. US sanctions on some of the world’s top oil exporters such as Iran and Venezuela have also hit the industry hard. These hits have proven that a retraction in the oil supply can inflate oil prices.

Energy Outlook Publications

Energy outlook publications hold a lot of sway in the oil and gas industry. Publications like the International Energy Agency’s annual World Energy Outlook report don’t only offer projections. They themselves can have an effect on the industry as a whole.

When staying on top of industry trends, one must stay up to date with energy outlook publications.

Changing Energy Policies

Energy policies are strategies outlined by a government, intergovernmental agency, or firm to help balance resources and boost the energy landscape. These policies have shaped the oil industry for decades and will continue to do so.

Some great examples of such policies are those put forward by the US Department of Energy. Their policies refer to the production of all energy sources that affect the US.

The Popularity of Fracking

Fracking is a way of exploring gas and petroleum trapped beneath deep-rock formations. When fracking, fluid injects into rock formations under high pressure to crack the rock. This then releases hydrocarbons.

Fracking is common-practice but has come up against hurdles recently. The UK and Australia, in particular, are experiencing social and legal pushback when proposing new fracking projects.

Energy Transition

Energy transition refers to the long-term structural shift of a nation’s energy mix. A great example of energy transition in effect is the switch from oil and coal to natural gas.

Today, we’re seeing another energy transition underway with the rise of renewable energy. Many governments are now laying out energy policies aimed at fostering this energy transition.

The shift to renewables is one of the biggest trends to affect the oil and gas industries. It’s led many major companies to expand their portfolio or even shift wholesale into the renewable market.

The Oil and Gas Industry Is in Flux

The oil and gas industry is one of the biggest in the world but that doesn’t mean there aren’t factors affecting major change. Oil supply, energy outlook publications, changing energy policies, the popularity of fracking, and energy transition are only a few of the trends bucking the status quo this year.

Interested in renewable energy? We asked the question: is solar power really the best way to generate clean energy?

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Low crude oil prices and weak refining margins have hit ExxonMobil and rival Chevron’s profits in Q1 of 2016.

ExxonMobil reported a profit of $1.8 billion, a sharp decline from $4.94 billion for the same period in 2015 and its lowest quarterly profit since 1999.

Revenue dropped 28% to $48.7 billion, but it had strong results from its petrochemicals division.

Chevron has reported a quarterly net loss of $725 million.

That compared with a net profit of $2.57 billion for the same period in 2015 and was worse than analysts had expected.

Chevron CEO John Watson said: “We are controlling our spend and getting key projects under construction online, which will boost revenue.”

ExxonMobil shares rose 1.4% in New York on April 29, while Chevron fell 0.6%.Oil prices fall below 28

Meanwhile, oil prices hit their highest levels of the year on April 29, driven up by lower US production and a weak dollar.

Brent crude was up 12 cents at $48.26 a barrel in afternoon trading, while US oil rose 57 cents to $46.60.

US oil production has continued to fall in recent months, easing concerns about oversupply, while the dollar has lost almost 2% of its value against other global currencies in the past week.

A weaker US dollar typically contributes to a rise in oil prices, because oil is priced in dollars. When the dollar weakens against other currencies, oil becomes cheaper to buy, pushing up demand.

However, the latest rise in oil prices may be limited by a future increase in Middle East production, according to a note released by Deutsche Bank.

Iraq and the UAE are likely to raise production after maintenance issues are resolved, Deutsche indicated, and Saudi Arabia may also increase production significantly.

However, this may be tempered by events in Latin America, where Venezuela is struggling to maintain its crude output, according to a report from Eurasia Group.

Eurasia Group reported that low oil prices over the past two years have meant Venezuela’s government is running out of cash to keep its state-owned oil pumps operational.

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Oil industry giants, Halliburton and Baker Hughes, are in talks about a possible merger.

Baker Hughes, the industry’s third largest services provider, confirmed press reports, adding that the talks were “preliminary”.

Any deal with Halliburton, the sector’s No 2 behind the far larger Schlumberger, is likely to face competition issues.

The companies provide drilling and logistics services, but have been hit by falling oil prices and higher costs.

The falling crude oil price has made exploration less economical and the big oil and gas producers have been cutting costs. A tie-up would allow the companies to better weather the downturn in the market.

A merged Halliburton-Baker Hughes would create a company worth about $67 billion, employing initially 140,000 people. But its market capitalization would still be half that of market leader Schlumberger.

Analysts said that antitrust authorities in the US, Europe and China would want to investigate the terms of any deal, and that a merged group might need to sell some assets before approval was given.

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