If crude prices hold above $50 per barrel, U.S. oil drilling would begin to come back on line, but it will take prices solidly above $60 for most production to return, according to a new CNBC oil survey.
The survey, concluded Tuesday, also shows that expectations are low for any action from OPEC when it meets this week.
Higher oil prices have sidelined expectations for OPEC action, just as they could bring back U.S. shale drillers. But according to 55 percent of those surveyed, the resumption of U.S. drilling is unlikely to move oil prices from the current range. Forty-one percent said prices would go lower as a result or more drilling.
The survey also shows a clear divide on the outlook for prices. Half of the participants expect West Texas Intermediate crude to trade at $40 to $50 per barrel at the end of 2016, while 45 percent see oil above $50. In the latter group, 9 percent expect WTI to rise above $60 per barrel.
Fifty percent expect oil prices to move lower after summer driving demand peaks while 45 percent said they do not believe that will happen. Sixty-four percent, however, do not expect a plunge in prices similar to last summer's drop from $60 to $40 per barrel.
According to the CNBC survey, 73 percent of the strategists, traders and analysts found 10 percent or less chance that OPEC would come to an agreement on freezing production this week. OPEC members, along with Russia and other non-OPEC members, failed to reach an accord to freeze output at a meeting in Doha in April.
More than a third of the survey's 22 participants said they believe the oil market is currently rebalancing, though 18 percent expect it in the third quarter and 23 percent see the rebalancing in the fourth quarter. Eighteen percent expect the rebalancing in 2017, and they were evenly split between the first and second quarter.
"Oil prices have bottomed, but will remain choppy as we move through the remainder of the year. Higher highs and higher lows, with the most significant variables being the perception of global economic health (particularly China), ongoing US supply declines, tightening inventories and the Saudi/Iran dynamic," says Dan Pickering, co-president of Tudor Pickering, in response to the survey.
Supply remains the biggest risk to prices, according to 32 percent, while geopolitical risk was second at 27 percent. Demand could be the greatest risk, according to 23 percent; 18 percent pointed to fluctuation in the U.S. dollar.
The survey found that most U.S. shale drilling is expected to return when oil rises to $60 or above. Forty percent expected most production to return when prices reach $50 to $60, but 45 percent said it would take a price above $60 for most drilling to resume.
More than half say drilling could start to resume when oil reaches $50 to $55 per barrel. Some drilling could return when oil reaches $45 to $50 per barrel, according to 23 percent of the respondents.