The war between OPEC and US shale drillers is killing older oil fields at the fastest pace in 25 years - which could hurt the industry once the current oil glut has faded, consulting firm Rystad Energy believes. Amidst rising US production, the market largely ignored a 6.3 million - barrel slump in USA crude inventories last week to 502.9 million barrels, the lowest since January. "Per-barrel prices may fall back into the $20s early next year and average $35 a barrel in the first half of 2018, prompting massive cuts in US drilling rigs".
Without further cuts by OPEC and other producers, Goldman said crude prices could fall below $40 per barrel.
Oil prices were also lifted by reports that OPEC may be considering capping production in members Nigeria and Lybia.
The oil producers' monitoring committee meeting scheduled for later this month in Russian Federation has taken on heightened significance as oil prices languish at levels not seen since last November.
West Texas Intermediate for August delivery rose 8 cents to US$44.48 a barrel at 9.58am on the New York Mercantile Exchange.
Lingering doubts about the impact of an OPEC-led effort to balance the market pushed oil prices further away from $50 per barrel in early Monday trading.
The two countries have been invited to a joint meeting between OPEC and non-OPEC on July 24 in St Petersburg, Russia.
He said, "Venezuela's 2 million barrels of oil a day could literally go any day; Mexico looks poor; Azerbaijan's in trouble; China's own production is collapsing rapidly".
A report by Barron states that reducing supply of oil from Organization of Petroleum Exporting Countries (OPEC) could raise the price of oil by about US$60 per barrel.
"Capping Libya and Nigeria might help but won't cut the supply by much", he added.
Prices collapsed last month amid concerns that OPEC lacks the means to end the global supply glut that may last into 2018. Producers have reportedly begun to consider asking the two nations to limit their output. "Deepening the reductions under the current agreement is not on the agenda", Almarzooq said.