* U.S. output to fall by 255,000 bpd between Q2-Q4 2015 -
Goldman
* $1.5 trillion of U.S. oil projects uneconomic at $50/b -
Woodmac
By Henning Gloystein
SINGAPORE, Sept 21 (Reuters) - Oil prices edged up in early
trading in Asia on Monday as U.S. drilling slowed and analysts
estimated that $1.5 trillion worth of planned American
production was uneconomical at prices of $50 per barrel or
lower.
Crude oil prices have plunged almost 60 percent since June
2014, when soaring global production started to clash with
slowing demand. This includes losses of more than a quarter
since June this year as a sharp slowdown in China has sparked
concerns over the health of the world economy.
Analysts said the low prices were beginning to impact
production as drillers slow down new projects, especially in
cost-sensitive North America where drillers react fast to
changing prices.
U.S. energy firms cut oil rigs for a third week in a row
last week, a sign that the latest crude market weakness was
causing drillers to put on hold production plans, triggering a
slight increase in prices on Monday
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
trading at $44.84 per barrel at 0108 GMT, up 16 cents from their
last settlement. Globally traded Brent futures LCOc1 were at
$47.60 per barrel, up 13 cents.
"The current rig count is pointing to U.S. production
declining sequentially between 2Q15 and 4Q15 by 255,000 barrels
per day at the observed path of the U.S. horizontal and vertical
rig count across the Permian, Eagle Ford, Bakken and Niobrara
shale plays," Goldman Sachs (NYSE:GS) said.
"The implied year-on-year growth by 4Q15 of 120,000 barrels
per day is lower than the prior week's estimate of 125,000
barrels per day," it added.
Analysts said low prices would have a bigger impact in the
longer term as producers struggle to cut enough costs.
"Operators are seeking an average cost reduction of 20-30
percent on projects, supply chain savings through squeezing the
service sector will only achieve around 10-15 percent on
average," energy consultancy Wood Mackenzie said.
"$1.5 trillion of uncommitted spend on new conventional
projects and North American unconventional oil is uneconomic at
$50 a barrel," it added.
(Editing by Himani Sarkar)