PROFIT warnings from US oil giants have set the scene for sharp falls in revenue for Woodside, Santos and Oil Search in forthcoming quarterly reports, as tumbling oil prices inflict a heavy toll on the energy sector.

Chevron is the latest oil major to highlight the tough conditions. Last week it said its first quarter earnings would be "sharply lower" than the December quarter after much lower oil prices in January and February.

And in a sign the price of oil may remain in the doldrums for some time, the International Energy Agency forecast the pace of contraction in oil demand this year was close to levels not seen since the recession of the 1980s.

Amid this stagnating market, the three biggest Australian oil companies will report their quarterly revenue and production next week. In the December quarter, Woodside's revenue fell by a fairly modest 7 per cent, Santos's dropped 11 per cent and Oil Search's fell 32 per cent.

But in a sign of the severity of the downturn since then, Chevron's US fields realised an average price of just $US33.37 a barrel in January and February, down 35 per cent on the fourth quarter price of $US51.43.

Chevron's update followed another report of low prices from US giant ConocoPhillips two weeks ago, which said the realised price for West Texas International crude had fallen 36 per cent.

Oil closed at $US52 before the Easter break, a fraction of the price reached at the peak of the commodities boom, when it soared as high as $US147 a barrel.

Meanwhile, the latest Oil Market Report from the International Energy Agency in Paris said the recent rise in oil prices above $US50 a barrel reflected higher optimism in markets.

However, it also revised down its forecast for global oil demand by 1 million barrels a day to 83.4 million after much lower-than-expected demand in the first quarter. "Pervasively weak market fundamentals could limit further gains for now," the report said.

Local oil producers were initially cushioned from the full brunt of lower oil prices because the Australian dollar lost 30 per cent of its value against the US dollar, in which oil is traded. However, the currency may have worked against them this quarter, as it has jumped 15 per cent to US72c in the past two months.

Chevron reports final first quarter results early next month, and Bloomberg has reported its earnings may slump by 61 per cent to $US2.02 billion.

business.smh.com.au