First-quarter 2016 financial results from U.S. onshore producers reveal an improving balance between capital expenditure and operating cash flow. Although operating cash flow was the lowest in any quarter in the past five years, larger reductions to capital expenditure brought these companies closest to self-finance (when capital investment can be paid for entirely from operating cash flow). With crude oil prices such as the global benchmark Brent price averaging over $45 per barrel in the second quarter—a 34% increase from first-quarter 2016—cash flow may improve and help offset declining revenue from lower production.

The crude oil contract for August on the New York Mercantile Exchange gained 93¢ on July 14 to settle at $45.68/bbl. The September contract climbed 98¢ to $46.42/bbl. The natural gas contract for August was down 1¢ to a rounded $2.73/MMbtu. The Henry Hub gas price was $2.77/MMbtu, down 4¢ on July 14.

The crude oil contract for August on the New York Mercantile Exchange plunged $2.05 on July 13 to settle at $44.75/bbl. The September contract dipped $2.13 to $45.44/bbl. The natural gas contract for August was up a fraction of a cent to $2.74/MMbtu. The Henry Hub gas price was $2.81/MMbtu, up 6¢ on July 13.

Global consumption of petroleum and other liquid fuels is estimated to have grown by 1.4 million b/d in 2015. EIA expects global consumption of petroleum and other liquid fuels to increase by 1.4 million b/d in 2016 and by 1.5 million b/d in 2017, mostly driven by growth in countries outside of the Organization for Economic Cooperation and Development (OECD). Non-OECD consumption growth was an estimated 1.0 million b/d in 2015, and it is expected to be 1.3 million b/d in 2016 and 1.5 million b/d in 2017.

Oil prices have recovered more than 70 percent from the 12-year low reached earlier this year as OPEC’s strategy to pressure rivals with lower prices slowly succeeds in eliminating a surplus. Output in the U.S. has retreated to a two-year low as the boom in shale oil production faltered, while Saudi Arabia told OPEC it raised output last month close to a record.

The light, sweet crude oil price for August delivery fell moderately on the New York market July 11 to settle under $45/bbl. The Brent crude oil price for September delivery fell about 50¢ on the London market to settle at $46.25/bbl.

Iran exports about 2 million barrels of its daily output of 3.8 million, said Mohsen Ghamsari, NIOC’s director of international affairs. The country has regained about 80 percent of the market share it held before the U.S. and European Union tightened sanctions on its oil industry in 2012, he said. Sanctions were eased in January, and Iran plans to double crude exports.

The World Bank is downgrading its 2016 global growth forecast to 2.4 percent from the 2.9 percent pace projected in January. The move is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.

The current oil price environment has had a negative impact on oil investments, hurt energy efficiency and boosted the share of oil produced in the Middle East.

Two projects worth $45 billion announced this month show the world’s largest oil companies are regaining the confidence to make big investments, emboldened by rising crude prices and low costs that promise to trigger more expansion ahead.