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Oil prices rise more than 2% in early trading; have oil prices bottomed out?
Have oil prices finally bottomed out? Analysts give a cautious yes, although few expect oil prices (and thus diesel) to return to the high prices of a few years ago.
Today oil price futures rose more than 2 percent in early Asian trading, adding to gains earlier this week. U.S. crude was up 76 cents at $39.22 a barrel and earlier traded as high as $39.38, Bloomberg News reported.
OPEC members and other oil producing countries are to meet next month over keeping oil production at current levels, even if Iran doesn't participate, although it was hoped producers would cut production. But a freeze, if it materializes, would be welcome news in any case.
Oil prices began to drop in mid-2014 as mega-user China saw its economy slow and imports sag. But instead of cutting production Middle East exporters waged a price war to defend their market share, hoping to staunch the flow of shale oil production from the U.S. and hurt their profits.
The oil glut has forced many U.S. drillers to idle their rigs while big oil companies cut jobs by the thousands.
Shrinking the global oil glut will take time. U.S. crude oil stocks rose last week to record highs for a fifth straight week, according to the Energy Information Administration.
And although the oil market is rallying somewhat of late, the question is whether oil prices will continue to climb, stall, or even fall again.
Since a freeze by oil producers was proposed last month prices have recovered by about 50 percent from decade-low levels, Bloomberg reported, adding that although oil inventories are still high they're not increasing at the levels they were before.
Stay tuned.
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