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Oil-patch austerity is starting to take a back seat to growth as rising crude prices eclipse investor fears over high debt levels and weak cash flows.

Third-quarter results for Canada's energy industry start rolling out this week, and the numbers are expected to show a modest improvement in the sector's overall financial health.

With crude prices still trading at less than half their mid-2014 peak, no one is predicting a speedy return to bumper budgets and big-ticket megaprojects. But in some corners of the industry, there is growing confidence that the worst of the brutal downturn is at an end.

A hard focus on survival – marked by relentless cuts to spending and staffing levels – is being replaced with a sense of optimism as producers begin mapping out spending plans for the year ahead, said Laura Lau, senior portfolio manager at Brompton Funds in Toronto.

"I think people still care about costs," Ms. Lau said. "But it's more balanced with, 'When are you going to increase your capital budget?'"

West Texas intermediate crude averaged $44.94 (U.S.) a barrel in the three months ended Sept. 30. That's down from $46.50 a year ago, but it represents a sharp increase from lows hit earlier this year.

The U.S. benchmark price has nearly doubled since mid-February and on Friday settled at $50.85. Alberta wholesale natural gas prices averaged $2.38 (Canadian) per 1,000 cubic feet in the period, down slightly from a year ago but up 70 per cent from the second quarter.

Some companies are already putting drilling rigs to work. Encana Corp. this month said it would spend between $1.4-billion (U.S.) and $1.8-billion in 2017, compared to a range of $1.1-billion to $1.2-billion this year.

Crescent Point Energy Corp. raised its 2016 budget by $150-million (Canadian) to $1.1-billion and has set a preliminary spending target of $1.4-billion for next year.

Such moves will eventually give hard hit oil-service providers a measure of relief, although analysts say pricing gains in that segment of the industry are unlikely to register until later this year.

The improving sentiment comes as members of the Organization of Petroleum Exporting Countries prepare to meet next month in Vienna to hash out details of a proposed output cut, the cartel's first in years.

There are still concerns about which countries would shoulder the biggest cuts and how compliance with any deal would be verified. But even the prospect of restraint from the group has boosted confidence, signalling the end of top producer Saudi Arabia's two-year war to drive higher-cost rivals out of the market by keeping prices down.

Meanwhile, several forecasters have pointed to dwindling U.S. inventories as evidence that oil markets are tilting closer to balance after years of crippling oversupply and sluggish demand.

"I'm certainly not hanging my hat on this [OPEC] deal happening, because I think we already have considerable visibility to a balanced market," said Mason Granger, portfolio manager at Sentry Investments in Toronto.

The question now is which companies are best positioned to take advantage of a possible rebound. "The biggest thing that we're going to be looking for out of the quarter is some sense for activity levels from the companies and where their heads are at outlook-wise," he said.

Integrated oil sands producer Suncor Energy Inc. reports third-quarter results Oct. 26, followed by Cenovus Energy Inc., Husky Energy Inc. and MEG Energy Corp. on Oct. 27. Imperial Oil Ltd., the other large producer with refining operations, releases numbers Oct. 28.

The results will reflect production levels that have ramped up to full capacity following shutdowns related to northern Alberta wildfires in the spring, with Suncor forecast to see the biggest jump in earnings from the second quarter.

A big unknown is the degree to which rising crude prices trigger a sustained rebound in U.S. shale output, with companies taking advantage of recent gains to lock in higher prices for future production.

Fear of another price drop is likely to keep some from setting overly aggressive spending targets, instead focusing on debt repayment, analysts at investment bank Peters & Co. Ltd. said in a recent report.

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