As the United States continues to reduce its dependence on foreign oil, a boom in domestic production is expected to have a major effect on the global market.
According to a report from Fox Business, crude oil on the New York Mercantile Exchange (Nymex) is assuming the role of a global benchmark.This has caused some concern in analysts because a glut of Nymex oil has resulted in a significant price discrepancy between Nymex and Brent crude oil – currently the European benchmark. The thought is that solidifying Nymex oil as the global benchmark will cause prices to fluctuate at severe levels and have an adverse effect on the entire market.
However, Gary Morsches, managing director in energy products at CME Group Inc., said in a statement on Tuesday that the differences between the two will not last. Morsches indicated that while the United States adjusts its domestic production efforts and its dealings with foreign oil distributors, Nymex will increase in global relevance.
"Incremental supply and incremental demand are really what set the price of a commodity… clearly the United States is becoming an incremental producer and displacing imports," he said.
Regardless of the global oil market's future, it's important for oilfield operators to be prepared for any changes in demand, pricing or other considerations. Extraction must always be conducted efficiently to limit the amount of excess spending by the oil companies. Investing in solutions such as artificial lift can allow companies to extract oil quickly and safely, thus helping producers meet varying demand levels.
Oil companies looking to improve their operations should contact an oilfield technologies provider to acquire the right solutions to fit their needs.