for Royal Dutch Shell
The glut of supply could last years, threatening to keep prices low until the 2020s, but the oil majors are playing the long game, expecting the demand for gas to grow substantially over time.
The promising results from Brazil's auction demonstrate that the country's offshore sector remains attractive even as the global oil industry has been hesitant to invest in big projects as a result of relatively low oil prices.
The North Sea is seeing a revival, thanks to lower production costs, new investment, a slight uptick in output, and newfound optimism. But it's unclear if the region's reversal of fortunes will last.
Oil majors may not be entirely out of the woods yet, but first-quarter performances suggest that they are on the upswing after nearly three years of mostly red ink.
Exxon and other oil majors are still giving the green light to a handful of complex and risky but potentially highly profitable projects offshore, while at the same time increasingly shifting more resources into safer, smaller-scale shale drilling.
Oil majors are now cash flow neutral with oil prices trading around $50 per barrel, a milestone achieved after relentless cuts to spending and payrolls over the past couple of years.
Republicans have pushed back hard against energy and environmental action Obama has taken after the election, and they will likely try to overturn his decisions once he leaves office.
Third quarter earnings figures for the oil majors reveal a mixed picture for the industry: Companies are dealing with more debt, weaker refining margins, and deeper spending cuts, but they are also experiencing increased optimism that the worst might be over.
For Britain’s oil sector, the possibility of a “Brexit” has not raised alarm bells as of yet, but there could be higher costs for the industry if Britain breaks up with Europe.
The outlook appears bleak for Canada’s oil industry, with prices for some crude grades in the country trading for just $15 per barrel. The outlook is so bad that some companies are shutting in production.