Some E&Ps are ramping up production, spending more, ignoring balance sheet repair and continuing to get rock bottom prices from oilfield service companies. Can the recovery handle it?
An OPEC and non-OPEC technical committee recommended that producers extend a global deal to cut oil supplies for another six months from June, a source familiar with the matter said.
For crude prices to average $50 to $52 in 2017, OPEC must extend quotas and maintain compliance, and demand must increase, according to a report.
Oil held near $53 a barrel on April 21 but was on course for its biggest weekly drop in a month due to doubts that an OPEC-led production cut will restore balance to an oversupplied market.
However, sellers’ value expectations may lead to a widening of the bid-ask spread, PwC said.
Oil prices could fall again by the end of the year due to a rapid increase in U.S. shale production, said Patrick Pouyanne, CEO of French oil and gas giant Total.
Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister Khalid al-Falih said.
U.S. crude stocks fell last week as refineries hiked output, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said April 19.
Ministers from OPEC will convene at their Vienna headquarters. Joint talks with non-OPEC oil ministers will also take place that day, two sources said.
Crude fell in the previous two sessions, but it received a boost from comments on April 19 by the secretary-general of OPEC that the group was committed to cutting inventories to the five-year average.