After cutting spending and staff levels to the bone, U.S. oil executives say they are getting ready for new drilling projects as a 50 percent increase in crude prices since February leads them to believe the worst of the downturn may be over.
Any price rise above $50 per barrel could fuel a resurgence in the U.S. shale industry, which saw drilling and fracking of new wells put on hold over the past year as oil prices plumbed near $25 per barrel.
But prices have steadily risen to around $44 per barrel, near levels where money could start flowing again. While myriad factors could push prices lower again and many companies are stuck in bankruptcy, prominent executives say there is a pending upswing in oilfield activity globally and that work will come back fastest in North America.
“The outlook for commodity prices is improving,” Al Walker, chief executive of oil producer Anadarko Petroleum Corp (APC.N), said on Tuesday after the company posted better-than-expected quarterly results.
“It goes without saying that things look better today than they did 90 days ago.”
Dave Lesar, chief executive of oilfield services provider Halliburton Co (HAL.N), said he believes the U.S. drilling rig count has hit a bottom and likely will rise later this year.
U.S. oil drillers last week cut rigs for the sixth week in a row to the lowest level since November 2009. The industry has shed more than 250,000 jobs globally, nearly half in the United States.