CRUDE oil prices closed up for
a second straight week on
Friday after another drop in the
U.S. rig count, pushing Brent
crude prices to a 2015 high
above $60 a barrel.
However, market skeptics
cautioned that the rally could
fade because supplies keep
coming.
Many traders and analysts
believe there is a global
oversupply of nearly two
million barrels per day of crude
oil.
They say little has changed
fundamentally to explain the
price rebound of the past two
weeks.
The number of oil drilling rigs
in the United States fell this
week to its lowest since August
2011, data showed on Friday.
But the market’s reaction was
relatively tepid compared with
the past two weeks when prices
spiked on declining rig counts.
“I think people are starting to
understand to a certain point
that, even if rig counts go
down, it’s not going to affect
production in the short term.
It’s going to take a few months
for that to happen,” said Tariq
Zahir, managing member at
Tyche Capital Advisors in Laurel
Hollow in New York.
U.S. crude inventories have
swelled to record highs of
nearly 418 million barrels,
government data showed last
week.
Brent settled the session up
$2.24, or nearly four per cent,
at $61.52 a barrel. It rose a six
per cent on the week and 15
per cent month-to-date.
Brent’s gains increased this
week after its front-month
contract switched on Thursday
at a premium.
U.S. crude CLc1 finished $1.57,
or three per cent, higher at
$52.78 a barrel.
Oil prices more than halved
between June and January as a
global glut pushed Brent from a
summer peak above $115 to a
near six-year low under $46.
“Naturally, when prices fall that
much within that short a time,
you’re likely to have a severe
rebound as well, though
speculators are possibly adding
more fuel on the way up now,”
said Phil Flynn, an analyst at
the Price Futures Group in
Chicago.
Some traders attributed
Friday’s strength to an
unexpected acceleration in euro
zone economic growth in the
final quarter of 2014.
The bloc’s largest member,
Germany, grew at more than
twice the expected rate.
Market bulls were also betting
that cuts in exploration budgets
will help mop up some of the
excess supply.



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Good one, I see the possibility of rising oil prices again. Shale oil may take sometime before it will outsell crude.

Good one, I see the possibility of rising oil prices again. Shale oil may take sometime before it will outsell crude oil.