Los Angeles, CA (PRWEB) September 17, 2013
The Hydraulic Fracturing Services industry has grown over the past five years, because high oil and gas prices stimulated demand for petroleum extraction. Hydraulic fracturing, commonly known as fracking, is used to extract hard-to-reach underground crude oil and natural gas reserves. Because specialized oil field service providers can conduct hydraulic fracturing at lower costs, downstream oil and gas extraction firms turned to industry operators to provide fracturing services. According to IBISWorld Industry Analyst David Yang, "US natural gas production increased strongly at an annualized rate of 3.6% during the past five years due to hydraulic fracturing." As a result, IBISWorld expects industry revenue to grow at an annualized rate of 5.8% $8.4 billion in the five years to 2013.
However, the rapid rise in domestic oil and gas production resulted in an oversupplied market. US natural gas prices fell at an annualized rate of 16.0% during the past five years. "A glut of crude oil also built up in Cushing, OK, since 2011 due to a shortage of export pipelines, causing domestic crude oil prices to fall," said Yang. As petroleum prices fell, downstream demand for oil and gas extraction fell, thereby cutting into demand for hydraulic fracturing. Industry revenue is estimated to decline 12.4% in 2013 as a result.
US crude oil and natural gas prices are anticipated to steadily recover to stable levels during the next five years. The planned Keystone XL pipeline, as well as other pipeline infrastructure projects, will bolster oil and gas export capacity. As exports rise, US petroleum prices will converge to higher world petroleum prices, bolstering industry revenue and profitability. IBISWorld forecasts that revenue will grow in the five years to 2018. However, increased public and government scrutiny regarding hydraulic fracturing's environmental impact may lead to greater regulatory oversight, which can cause higher operating costs in the coming years.
The major players in this industry are Halliburton Company, Baker Hughes International, CalFrac Well Services, and Basic Energy Services.
For more information, including profit estimates, visit IBISWorld’s Hydraulic Fracturing Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Hydraulic Fracturing Services industry provides hydraulic fracturing services for oil and natural gas extraction companies. The technology allows oil and natural-gas extraction companies to reach hard-to-find natural gas below the sediment.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
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