The oil and gas automation market to grow at CAGR of over 6.47% by 2024.

The oil and gas automation market is expected to register a CAGR of over 6.47% during the forecast period, 2019 – 2024.

The oil and gas automation market is expected to register a CAGR of over 6.47% during the forecast period, 2019 – 2024. In the oil and gas industry processes, there is always a high demand for safety and reliability. The supply chain of this industry creates a great need for automation, industry expertise, and an extensive partner network. Process automation helps oil and gas producers to integrate information, as well as control, power, and provide safety solutions, in order to respond to the dynamic global demand. 

 From the past, it is observed that even though the oil prices are fluctuating, the demand for oil and gas remained stable. Price of oil per barrel has gone to a peak level of more than USD 140, and also, a trough low to USD 20, but the average energy consumption is steadily increasing, globally. As of 2017, it was estimated that the world consumed over 98 million barrels of oil every day, indicating a growth of almost 2% when compared to 2016. Such a rate of consumption was primarily spiked by the reduced crude oil prices and increasing demand from automobiles. 

 In addition to that, since the low prices of crude hit the market in early 2014, the major consumption groups in the Asian and European countries have predominantly benefited from these changes. In fact, according to the British Petroleum’s estimates, the regions witnessed a towering increase in the refinery capacities and throughputs. The refining capacity and throughput of the Asia-Pacific region spiked by 1.3% and 8.6%, respectively, between 2013 and 2016. It is estimated that the region was able to refine over 27,000 million barrels of oil every day, in 2016, owing to cheaper crude oil. The low crude oil price situation occurred toward the end of 2014, due to the oversupply situation of crude oil, globally. The new-found shale resources in North America and high production in the Middle East forced down the prices in the global market. 

 To rebalance the situation, the Organization of the Petroleum Exporting Countries (OPEC) has taken the initiative of minimizing crude oil production, until the prices are back to normal. This has affected the demand for automation in the industry severely.Although the oil prices have come back to their usual prices, the cutbacks in the name of reserve development and OPEC’s decision are expected to create supply constraints. Cutting back oil production, in order to balance the oversupply situation, might be a meaningful choice. But, the extended cuts, until the end of 2018, are raising the fear that this situation may send the world into a supply shock. Recovering from the oversupply situation is a crucial step for the global oil and gas industry. However, improving from the case with a supply shock may lead to some unexpected results, thus adversely affecting all the industries.