Shale Boom is Officially Over, Depressing Guar Gum Prices in the U.S. Market

Houston (USA): Guar Gum prices are projected to drop in the U.S. market, according to the data provided by ChemAnalyst. Fracking is a technique that releases oil and shale gas trapped in the rock using Guar Gum powder. It aids in accelerating the entire oil extraction process, which opens the door for the enormous demand for Guar Gum powder by oil businesses. Despite all this, the price of Guar Gum will foresee a decline in demand in the domestic market.

The U.S. shale oil industry's days of rapid expansion are finished leading to low demand for Guar Gum from natural gas-producing industries. Although American oil production is increasing, it is doing so at a considerably slower rate than before the 2020 fall and at a lower rate than was anticipated a few months ago. The new priorities of the shale patch, capital restraint, and a focus on shareholder returns and debt repayments, in addition, to supply chain limitations and cost inflation, have slowed the expansion of U.S. oil output. This reason has further supported the decrease in demand for Guar Gum in the domestic market, declining the price product.

The inconsistent messages from the Biden Administration to the American oil and gas industry, including repeated claims that the sector is to blame for high gas prices and, most recently, the possibility of increased taxes, are also failing to motivate American producers. Manufacturers are cautious about spending more on drilling when there is no medium-to-long-term plan for how the American oil and gas resources could be used to enhance energy security in the nation and support Western allies that depend on imports. Lower exports would further reduce the demand for shale gas in the international market.

The price for Guar Gum would fall in the upcoming months, backed by the decrease in demand from the shale gas-producing industries.