Oil prices remain within shouting distance of the US$80 per barrel mark while high gas and electricity prices might force European manufacturers to temporarily shut down plants to conserve fuel this winter.

Reuters reported that front-month gas prices are now six times more expensive than at the same time last year as the region struggles to import enough gas to fill its depleted gas stores, which are at their lowest level for more than a decade.

Energy saving measures including reduced street-lighting and extended closures of government buildings, offices and schools over the mid-winter holiday period are likely before residential customers are urged to turn their thermostats down.

However, there may be a little bit of relief coming with activity in the US shale sector starting to pick up.

Market intelligence provider Primary Vision noted that US shale completion activity has continued to ramped up.

While the bump to 254 completion spreads occurred a week later than forecasted, this ensures that shale activity will start October on a very strong footing.

Primary Vision adds that natural gas/liquids are likely to attract the most near-term investors as there is a lot of staying power in pricing given the global gas shortfall, which supports US LNG exports, and the expansion of petrochemical assets driving liquids adoption.

Oil price gain arrested

Further oil price gains have also been held in check by an unexpected rise in US crude inventories with the Energy Information Admininstration noting last week that inventories had increased by 4.6 million barrels for the week ended 24 September.

This is in line with the American Petroleum Institute’s estimate of a 4.1MMbbl increase and contrasts with the average decline of 4.5MMbbl expected by analysts polled by S&P Global Platts.

It also follows seven consecutive weeks of declines due to Hurricane Ida shutting down oil production in the Gulf of Mexico.

However, The Price Futures Group senior market analyst Phil Lynn told Marketwatch that overall fundamentals for oil and products remained extremely bullish as supplies of almost all fuels remained tight around the world.

“Demand for products and energy [are] rising as recent lockdowns around the globe due to the Delta variant of the COVID-19 plague are being lifted,” he added.

Further curbs on oil prices could come from expectations that OPEC and its allies will proceed with a decision to bring another 400,000 barrels per day of production back on line later on 4 October.

Primary Vision added that Libya had significant potential to increase production and has started seeking investment from foreign partners, who will have to get comfortable with the direction of the politics and underlying tribes.

Libya has a lot of low hanging fruit in terms of conventional plays that can be increased along with both onshore and offshore exploration opportunities.