With 2017 halfway behind us, now is a good time to look at Drilling activity and how it is impacting oilfield tools and services in 2017 — and how it will continue to affect us in 2018.

When we published our 2015 Drilling Outlook here on the Keystone Energy Tools blog two years ago, things weren’t so rosy:

Falling prices for oil and gas have caused many explorers to slash their capital spending plans for 2015, and along with reduced spending, there’s been a reduction in drilling plans.

What has changed?

A lot. For starters, The Energy Information Administration says domestic output will climb to 9.31 million barrels produced per day in 2017 and says to expect a record 9.96 MMbpd in 2018.

Driving this production is the fact that the number of active domestic drilling rigs has nearly tripled over the last year (933 as of June, already up from 703 as of May), and given how long it takes for new wells to reach maximum production we can expect the production forecasts for 2018 to creep even higher than the EIA’s estimate.

For most of 2017, oil prices haven’t been hurt by this increase in new oil and natural gas rigs, with a barrel of Texas Light Sweet fetching $44.65 a barrel in June. In recent weeks, however, U.S. crude oil could be entering a bear market after tumbling below $43 a barrel.

Still, domestic oil production looks a lot better in 2017 and going into 2018 than it has in years.

How about our neighbors to the north? The Petroleum Services Association of Canada (PSAC) has updated its 2017 Canadian Drilling Activity Forecast, calculating the number of wells drilled across Canada to be 6,680.

So what can you expect for drilling operations in 2018? Here are a few predictions. (If you have any others, contact us — Keystone would love to have you in on the conversation.)

The market could stabilize. Saudi Arabia and Russia have pledged to do “whatever it takes” to stabilize the market since their economies depend on oil revenues, but the IEA says 2018 supplies from Brazil, Canada, the U.K., Kazakhstan, Ghana and Congo will go up.

Global oil consumption will rise. In fact, in 2018 it will be at record levels. In spite of the lip service given to electric cars and solar power plants, the International Energy Agency says global crude consumption will top 100 million barrels per day for the first time in 2018.

Iraq will be a major player. Iraq has been ignoring an OPEC agreement to cut back on crude supplies (they say they need the money to fight ISIS). Already in 2017, they have become the top supplier to India and shipments to the U.S. have increased as well.

U.S. shale operators will lead the way with new, more efficient technologies. The largest growth in production has been in the Permian Basin. Geologists in the field there know more about the rock formations than they did even a year ago. Exploratory teams in Texas are using better techniques to extract those precious hydrocarbons.

In 2018 drilling operations will demand certified oilfield tools that are traceable to material and heat treatment, fast delivery to the rig and knowledgeable sales people and quick turnaround on quotes.

That’s why Keystone is excited about the prospects for growth in the next couple of years — we are ready to equip operations in the Gulf Coast, West Texas and all around the world. Things are no doubt going to be very busy in 2018.