Global oil and gas companies are expected to raise exploration and production (E&P) spending in 2017 by 7 percent, marking the first increase in three years, Barclays said on Monday.

Oil prices have recovered after a more than two-year slump caused by a glut due to U.S. shale oil flooding the market. Prices have risen about 21 percent since the OPEC, which accounts for a third of global oil output, signed an agreement in November to curb supply.

Brent crude futures were down 2.03 percent at $55.94 a barrel at 1214 GMT (7:14 a.m. ET) on Monday. Prices had fallen to a more than 12-year low of $27.10 last January.

“With OPEC putting a floor on oil prices, operators have greater confidence to drill and complete, although the early stages of the recovery will be uneven,” Barclays analysts wrote in a report.

Barclays also said it expects North American oil companies to lead the spending growth with a 27 percent jump. Production, however, is expected to fall as higher service costs are likely to dilute the effect of a larger budget, the brokerage said.

International spending is expected to increase 2 percent, according to Barclays’ survey of 215 global oil and gas companies. The survey was conducted when Brent was trading at about $55 a barrel and WTI at $50 a barrel.

Spending on offshore projects is expected to fall 20-25 percent in 2017, compared with estimates of a 34 percent fall in 2016.

Source: Reuters (Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty)