Oil Titans Meeting in Houston After Two-Year Price War

The biggest names in the oil world come together this week for the largest industry gathering since the end of a two-year price war that pitted Middle East exporters against the firms that drove the shale energy revolution in the United States.

All of the principals — the Saudis, other Persian Gulf producers, Russians, Brazilians, Mexicans, big oil and US shale drillers — will meet in Houston starting Monday, on panels, at dinners and in the hallways of the annual CERAWeek energy conference, sponsored by IHS Markit, a global financial information and analytics company, Reuters reported.

When OPEC in November joined with several non-OPEC producers to agree to a historic cut in output, the group called time on a fight for market share that drove oil prices to a 12-year low and many shale producers to the wall.

Oil prices are about 70% higher than they were the last time oil ministers and the chief executives of Big Oil met in Houston a year ago at CERAWeek, the largest annual industry meeting in the Americas.

The ebullience as both sides enjoy higher revenues will be a welcome relief from the gloom of a year ago, near the depths of the price war.

"The oil market has been rebalancing and the powerful forces of supply and demand have been working," said Dan Yergin, vice chairman of conference organizer IHS Markit and a Pulitzer Prize-winning oil historian. "The mood will be different this year."

OPEC's November deal, the prospects for its continuation and rosier investment prospects for the industry will dominate the discussions, with state-run producers and Big Oil both positioning themselves for an upturn in the notoriously cyclical business.

Twice as many OPEC ministers as a year ago - plus Russia and India's top energy officials - will be in the capital of the US energy industry.

The meeting, however, will not be without simmering tension between US oil producers and OPEC. One of the biggest questions in the oil market is how quickly and how much shale producers will boost output. A sharp rise from the US shale patch could undo the Saudi-led deal to reduce the global oil glut.

Oil's resurgence is not confined to America. Already this year, Total and BP have launched multi-billion dollar deals to expand in Brazil and Mauritania, respectively. Better prices could stir a new round of merger activity, according to some analysts.