There are four important focuses for investors this year, writes Ellen R. Wald for Forbes. First of all, investors should watch OPEC: Market watchers will need to keep tabs on OPEC and non-OPEC monthly production decreases to see if key oil producers are adhering to their quotas under both the November OPEC production agreement and December OPEC/Non-OPEC production agreement.
Secondly, North American oil producers: 2017 is not likely to see a roaring return to the exuberant shale oil production of 2012 and 2013. Many companies, like Continental Resources and Pioneer Natural Resources increased their shale oil holdings significantly over the last two years and, while optimistic, are proceeding cautiously with production.
Thirdly, oil services firms: After two long years of contraction, companies that provide workers and equipment to oil and gas extraction companies will finally start expanding in 2017. These include well-known firms such as Halliburton, Baker Hughes and Schlumberger. Already, Halliburton has announced it is hiring 200 workers for oil production in the Permian region this month. Even if the price of oil does not exceed $60 a barrel this year, oil companies seem to have secured the credit they need to begin to spend on exploration and production for the long-term. This means oil services companies will gradually be restarting idled equipment and rehiring laid-off workers, during 2017.
And fourth, the alternative energy in America: 2017 could bring significant changes to the finances of alternative energy companies in the U.S.
If the Republican President and Republican Congress follow through with promised changes to the tax code, consumers may be without federal tax breaks for electric cars and other green technologies. Solar and wind energy companies may also be without some of the generous federal subsidies and tax incentives they currently enjoy. Whether the Department of Energy will continue to use taxpayer money to fund renewable energy ventures (as it has under Secretaries Chu and Moniz) is unclear.