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Despite growing global demand for LNG, prices have not followed suit because of its link with crude though abundant shale production in the U.S. might change that.
Because of ongoing oversupply, U.S. bank Goldman Sachs said this week that it did not expect a big recovery in prices any time soon. Despite this, some analysts said recent price falls in oil had been overdone.
On Pioneer's second-quarter results call, Sheffield said that production costs have fallen to $2.25 a barrel on horizontal wells in the Permian Basin of West Texas, so it is nearly on even footing with low-cost producers of conventional oil.
Around 20 projects in northern Alberta's vast oil sands had been put on hold since mid-2014. Analysts cautioned against concluding that oil sands growth would rebound rapidly.
Baker Hughes' outlook was more "sanguine" than its peers', said Evercore ISI analyst James West, noting that oil prices have slid from last week, when Schlumberger and Halliburton reported results.
The jihadist group has lost control of a series of oil fields, and is having to sell what production that remains at steep discounts to persuade truck drivers to collect it and run the gauntlet of U.S.-led air strikes.
After a nearly two-year slide in crude, higher oil prices may lead to higher production this year and in 2017, investors believe. However, a lot depends on whether the big rally in oil prices from February lows has run its course.
Weekly industry data from the American Petroleum Institute late on July 26 showed that U.S. crude stocks fell by 827,000 barrels in the week to July 22, well short of the 2.3 million barrel draw that had been expected.
Instead of seeing $60 a barrel, which would support an increase in production, the demand questions, and ongoing supply concerns, mean oil could fall further. U.S. crude settled at $43.13 on July 25, after earlier hitting a three-month low.
The Canadian oil and gas earnings season kicked off with signs of an industry recovery as Encana and Precision Drilling outlined plans to boost activity. Analysts said the uptick in optimism might be mirrored by some U.S. shale companies.
The market is concerned that gasoline supply will not clear up in the second half of 2016, causing refinery run cuts and another wave of excess crude, a North Carolina-based trader said.
Pre-downturn sanctioned projects are expected to grow offshore production next year, but the cancellation of pre-FID projects could create a ‘supply crunch’ later, report says.