Oil prices lost some of their shine over the past week, as reality set in. Oil markets remain oversupplied, inventories are still rising, and hopes have faded surrounding OPEC’s ability to negotiate some kind of production cut. Iran punctured bullish sentiment when it said that it would not accept the OPEC-Russia production freeze deal until it had returned output to pre-sanctions level, which means that it has no intention of choking off output until it ramps up production by an additional 1 million barrels per day.

Rally is too early. Even leaving aside Iran and the record high levels of oil sitting in storage, there could be a ceiling to the oil price rally due to the responsiveness of U.S. shale. A rally above $40 or $50 would bring U.S. shale production back online, due to the short lead times between new drilling and production. That would send prices back down. The key to a sustained rally is a more substantial cut back in production, which can only be possible if drillers are starved of capital, Goldman Sachs concluded recently. “An early rally in prices before a deficit materializes would prove self-defeating,” Jeffrey Currie, head of commodities research at Goldman Sachs, wrote in a March 11 report.

A reaction from the shale industry could take longer than expected, others argue. With battered balance sheets, thousands of laid off workers, idled equipment, and depleted access to capital, it is not as if oil drillers can spring into action immediately. For example, North Dakota’s Director of Mineral Resources, Lynn Helms, thinks it could take oil prices rising above $60 per barrel before drilling picks up. “If you’ve been on a strict diet for a long period of time, it takes a while to put the weight back on,” Helms told reporters last week. As a result, even if oil prices rise, it will take time for damaged drillers to repair their balance sheets.

 “Light at the end of the tunnel” for oil prices. The IEA, for its part, weighed in last week with a cautiously optimistic take. The Paris-based energy agency said in its latest Oil Market Report that oil prices may have reached a bottom. Supply disruptions from Iraq to Nigeria, coupled with falling U.S. production and a weaker U.S. dollar are all working together to push oil prices up from their lows. That could mean that oil prices have “bottomed out.”

The IEA revised its estimate for supply cuts, expecting a deeper contraction than it did in last month’s report: increasing its estimated cuts from non-OPEC producers from 600,000 barrels per day to 750,000 barrels per day. Iran’s expected ramp up in production has also been less impressive than expected. The oil markets will remain oversupplied through much of this year, but the supply and demand will converge much more rapidly in the second half of 2016. There is a lot of uncertainty, to be sure, but the IEA said that there is “light at the end of the tunnel.”

Obama admin cuts off Atlantic drilling. There was growing speculation that the Obama administration would take initial steps to open up the Atlantic seaboard to oil and gas drilling as part of the Interior Department’s latest five-year plan. Instead, the administration surprised the industry by removing the suspected lease sale for the Atlantic Ocean in its 2017 to 2022 proposed plan, released on March 15. The oil and gas industry have expressed strong interest in exploring the Atlantic outer continental shelf, which could hold 3.5 billion barrels of oil and 30 trillion cubic feet of natural gas. But the latest development may not be all that significant, given the fact that a new administration next year can reverse course. No drilling had been expected before the end of the decade anyways. Low oil prices would also mean that any E&P companies would probably proceed slowly with high-cost exploration. For now, though, the region remains off limits.

Apache and Shell drill in Egypt. Apache Corp. (NYSE: APA) and Royal Dutch Shell (NYSE: RDS.A) are set to start drilling Egypt’s first unconventional gas well by the end of March, with production slated for June. The projected will be located in Egypt’s Western Desert and will be a milestone for Egypt, a country that is in desperate need of natural gas. The project comes as Eni is also developing a massive offshore deposit of natural gas.

Electricity sales down in the U.S. In a new report, the EIA found that electricity sales in the U.S. declined on an absolute basis in 2015, down by 1.1 percent from the previous year. Steadily increasing energy efficiency, particularly from appliances, combined with slow economic growth have cut into electricity consumption. It was also the fifth time in eight years that electricity sales declined. As efficiency continues to improve, the growth prospects for utility companies are highly questionable.

U.S. West Coast LNG export terminal rejected. The Federal Energy Regulatory Commission rejected a permit for an LNG export terminal in Oregon late last week. The Jordon Cove LNG export terminal has been seeking permits for years, but FERC said the developers failed to demonstrate how the benefits from a pipeline that would feed the terminal would outweigh the adverse effects on landowners. The more than $5 billion project was one of the leading candidates to export natural gas from North America’s west coast.

Russia announces withdrawal from Syria. In a surprise move, Russian President Vladimir Putin announced the withdrawal of troops from Syria on March 14, after declaring victory. Putin had propped up his ally, Syrian President Bashar al-Assad, fighting off an array of opposition groups. UN-led negotiations are seeking an end to the multiyear war, and while any solution remains extremely difficult, there are glimmers of hope that a political settlement can be reached by all parties involved.