However, the world’s vast oil glut – which sent prices collapsing by 60 percent between June 2014 and January – continues to hurt sentiment.
But while there are signs that China’s building boom is slowing down, US production increased by approximately 68,000 barrels a day in July, according to the U.S. Energy Information Administration. This is 0.1% than the last month’s forecast. In spite of extreme volatility in energy markets over the last several weeks, crude prices have remained in a holding pattern since Labor Day.
Brent crude, the global oil benchmark, was trading 8 cents higher at $49.33 a barrel by 1008 GMT.
Despite its warning, Goldman Sachs said there was a less than 50 percent chance of oil falling to $20 per barrel.
“We are about to see a pretty dramatic decline in usa production growth”, said Papa, who was a key figure helping to spur the usa shale oil boom when he was at EOG Resources.
“This situation may not stay long, more than two years“.
It is exactly the outcome that OPEC was hoping to achieve. With more job cuts coming in the energy sector, oil should benefit from lower USA output as well as a more accommodative interest rate environment as the Fed has one hand tied behind its back.
Both Opec and Russian Federation are instead increasing production in a move to defend market share.
“This is very significant”.
Now Rystad believes that balancing point could occur during the first half of 2016, compared with in mid-2016 previously.
A report showing a fifth weekly fall in the USA oil rig count also underpinned crude prices. “It remains uncertain how fast prices will recover and where they will settle”, Ben van Beurden said at the Oil & Money conference in London. It also added that the gasoline stockpile rose by 3.3 MMbbls and distillate stocks rose by 0.2 MMbbls for the same period.
Speaking to CNBC-TV18, Ahmad says the slump in US September crude production was as expected. “The collapse in oil prices, which has been engineered by America’s major allies in the region – Saudi Arabia, the United Arab Emirates, Qatar and Kuwait – is crippling the Russian economy”.
The EIA still anticipates USA oil production will total 9.25 million barrels per day in 2015.
Oil prices had earlier dipped, weighed down by abundant supplies that have plagued the market for months.
“$100 oil is an anachronism for this decade”, said Kloza. That threat could keep a lid on prices for a few time.