2019 Gulf Coast Energy Outlook: Strong oil and gas production, complicated pricing forecast

    In 2019, the Gulf Coast region will build upon its 2018 economic gains in the energy sector, according to the 2019 Gulf Coast Energy Outlook, although those gains will likely be slower due to concerns about economic growth and geopolitical tensions.

    It’s all part of the Gulf Coast—specifically Louisiana and Texas—becoming a more integrated part of the overall world market, says LSU Center for Energy Studies Executive Director David Dismukes, who co-authored the report.

    “We are increasingly becoming a more export-oriented economy and we anticipate to continue being that way,” Dismukes said during a presentation today. “Investments are becoming more geared toward the world market than the domestic market.”

    Overall, U.S. and Gulf Coast domestic crude oil and natural gas production should continue to be strong next year, though the outlook for prices is more complicated now than it was last year. Considerable and growing geopolitical risks and uncertainties, researchers say, could push prices to levels over $90 per barrel.

    Regional employment is also expected to grow over the next year in both the upstream and downstream sectors for both Louisiana and Texas. For Louisiana, there are more jobs in refining and chemicals than upstream, a trend researchers predict will continue throughout the next three years albeit on a slower basis than originally thought.

    Key findings include:

    • Gulf Coast crude oil production is forecasted to rise to 8.4 million barrels per day by 2020
    • Regional natural gas production is anticipated to rise to 38 billion cubic feet per day by 2020
    • Futures market expects crude prices to converge to around $60 to $65 per barrel over the next few years, while natural gas prices could drop over the next two years and then stabilize at between $2.50 to $3 per thousand cubic feet of gas
    • The 2019 Gulf Coast petrochemical industry outlook is flat. While the GCEO doesn’t expect any chemical industry or LNG project cancellations, many announced projects might move out their commercial operation dates
    • U.S. refining appears to have a positive, yet limited growth outlook

    The annual report is a collaborative effort by the LSU Center for Energy Studies and the E.J. Ourso College of Business. Co-authors include Dismukes, LSU Economics & Policy Research Group Director Dek Terrell, and Center for Energy Studies Assistant Professor of Research Gregory B. Upton Jr.

    Check out the full 2019 Gulf Coast Energy Outlook.

    View Comments