U.S. President Donald Trump has promised to boost the U.S. fossil fuel industry and create more jobs by opening more areas to drillers, but there will be little real impact on the market in the short term, an energy consultant said on Wednesday.
"Opening up the environmentally sensitive areas that Obama had closed could make a difference that could increase conventional fuel production by 1 million barrels per day (bpd) or more, but that would take five to seven years, so in the short-term, there's no impact," said FGE founder and chairman, Fereidun Fesharaki.
The shale industry is likely to see just marginal benefits from any tax relief passed by the Trump administration, he added. Talk has swirled about a possible border tax of as much as 20% on imports including crude, which if passed could lead to aid domestic producers over supplies from abroad.
As well, last week Trump signed executive orders advancing both the controversial Keystone XL Pipeline and the Dakota Access Pipeline , based on approvals. Additionally, he signed orders expediting environmental review and approval process for high-priority infrastructure projects.
The president's moves have sparked hopes and spurred expectations that a number of other oil and gas projects that were languishing will be resurrected.
"There's all sorts of good, positive news for the oil business but no real impact on oil production; certainly nothing in next year or two," Fesharaki added to CNBC's Squawk Box .
His comments come as a Reuters survey found high compliance by members of the Organization of the Petroleum Exporting Countries (OPEC) to curb oil output which is set to fall by more than 1 million bpd this month. The drop signals a strong start by the group in implementing its first supply cut deal in eight years. Previous cuts in 2009 saw an initial compliance rate of 60 percent.
OPEC agreed to cut its output by about 1.2 million bpd from Jan. 1 for the first half of 2017 to boost oil prices. OPEC has also coordinated with other producers led by Russia for a total cut of nearly 1.8 million bpd.
Supply from the 11 OPEC members with production targets under the deal has averaged 30.01 million bpd, according to the survey based on shipping data and information from industry sources, down from 31.17 million bpd in December, Reuters reported.
Crude oil prices gained on the news of strong OPEC compliance, closing higher on Tuesday. They are flat in Asian hours on Wednesday with benchmark U.S. West Texas Intermediate moving around $52.70 a barrel while international benchmark Brent crude was around $55.40 a barrel.