Of course they are working to lower costs, anyone who is in business are always looking at lowering costs, but there is a limit to how much they can cut. It is very unlikely that shale oil can ever compete across the board with cheap oil from the Mid East. And most people investing in commodities are overlooking the demand side, that is where it fell apart not overproduction. Austerity is the culprit that slowed demand, it has turned into a punishment for the average consumer, for crimes committed not by them but by big business during the gw Bush economical crash. US demand is down some two million barrels from its high. Don't look for oil to break a hundred again until the world economy spurs demand.
The reality is OPEC and all other oil producing countries will be selling more oil to raise revenues, they will not be restricting production to raise prices as in the recent past. This will drive out high cost producers that cost them some of their market share. Down the road say in a couple of years, providing the foolishness of western austerity is dropped, oil prices will once again rise over a hundred bucks a barrel simply because it is the high cost producers that caused the oil glut in the first place, and many of those producers have dropped development plans. Bottom line with the cost of shale wells dropping substantially and other producers having to sell more of their cheaper oil, for the next two or three years the price range will be seventy to eighty.
"I also hear that U.S. refinaries are begging for heavy sour (that's PGH !!) and refusing light sweet. "
Not sure about the begging part because there is plenty of heavy crude available. About fifty percent of US refineries are geared for heavy crude, and the other fifty percent are designed for light sweet crude. Light sweet crude is more suited for gasoline production and heavy oil lends itself better for diesel production. Because of Shale wells which are light sweet and rich in natural gas liquids, the US is producing far more than the US refineries can use.