Crude Oil Shows Signs Of Recovery
On Thursday, oil rebounded, highlighting the market’s volatility and the power of the bidding investors. The investors are persistent in bidding on the revival of crude oil prices.
Light crude rose 37 cents, or 0.7% and reached 50.79 US dollars a barrel on the New York Mercantile Exchange. The international benchmark oil, Brent crude gained 1.8%, or 1.02 US dollars, reaching the price of 56.57 US dollars per barrel on ICE Futures Europe.
Both crudes started recovering from a staggering 6% loss on Wednesday. The crude oil prices are still at a 50% level compared to the last year’s record high prices. The oil stockpiles in the United States of America exceeded the expectations last week, and reached the highest level in the past 80 years, the U.S.Energy Information Administration report stated on Wednesday. The US production of oil also grew in the last week.
Profit taking by the market players who profited from the previous losses and are now buying back are likely to have influenced the rise in oil price on Thursday, senior vice president for energy futures at R.J. O’Brien & Associates LLC, Ric Navy concluded. Retail investors are also taking advantage of the price drop, and buying, hopping for a more significant recovery of oil prices, analysts concur.
Jim Ritterbusch, president of energy advisory firm Ritterbusch& Associates predicts crude oil to reach the prices of over 60 US dollars in the fallowing months, due to the shutdown of drilling rigs in United States, high refinery consumption and increasing oil demand.
Joel Moser, chief executive at Aquamarine Investment Partners, said that “Overall the industry is not behaving like there’s a long-term, persistent glut,” adding that “Nobody credible, smart or authoritative believes that beyond the balance of this year we’re going to see prices down or even as low as they are now.”