Source to the video: Link
In spite of the low crude oil prices that has struck the oil and gas industry, the U.S. continues to dominate oil and gas production in the world for the third year. Watch the video to learn more about the role of US in achieving this leadership position. This can be attributed to innovation in technology for oil and gas extraction. The adoption of fracking to increase the flow of oil and natural gas has boosted the production of these precious fuels.
Fracturing is the process by which a combination of water, sand and chemicals are injected into deep water formations present underground to make cracks and release the oil or natural gas present in them.
However, since June of 2014, oil prices have plunged and forced oil companies to curb production. Since the profit margins are affected, oil companies are attempting to delay the completion of new rigs and laying off employees.
Josh Boak said in a recent article:
“When oil prices plunge and billions of dollars are at stake, oil companies tend to respond quickly to curb production. The number of active rigs has fallen 50 per cent since October, according to Baker Hughes, the oilfield services company. This has led to layoffs, tighter budgets and fewer orders for equipment, all which hurt growth.”
What remains to be seen is if the U.S. economy will recover from the current state sooner rather than later. In spite of the low crude oil prices, American consumers are yet to increase their retail spending. When consumers increase their spending, it will play a significant role in boosting the economy.