Brent oil entered the bull market for the time this year on Friday the 6th of February. This surely comes as sigh of relief for all in the industry but a community is still cautious about the return of price dripping phase as the oversupplies persist. According the industry specialists the Brent market has grown at a whopping 20% in the last 7 days leaving the overall oil industry growth at 4% for the week. This is marked to be the biggest acceleration seen in the industry since 1998, observers in the industry are keeping their fingers crossed and hoping that the global situations for the oil market returns to normality.
Weekly reports on the industry behavior have indicated that major companies all over the globe have been forced to make acute reductions in the production process and thus deliberately have no growth. Oversupplies have been a stress as the price of crude oil has been at its poorest ever, as a precaution measure there have been meets organized between suppliers and oil producers from the gulf. The later were requested to cut short their producing capacities for the coming few months but they declined to do so. Earlier last week, refinery workers in parts of the US declared strike and this slightly raised the prices in the market.
Group of analysts for the industry predict lower supply growth rate for 2015 as the per barrel rate rebound is encouraged by improved market sentiments and expectations of the price levels to loom around the lower margins. Adding to this, the research study also indicates that according to the current prices the supply is not expected to keep at par with the growth; it is more likely to decline as the prices are nearing the cash costs.
Most companies from the sector are planning to keep their production activities to minimum levels or even flat for a further seriously damaging situation if it comes by.
However, the conditions are far from normalcy even today according to many traders worldwide. They accept that there is an excess supply of about 2 billion barrels of crude oil per day and they say the price rise last week is too little to fundamentally revamp things as they were tepid to set back the industry largely.