Oil Rises Above $60 After Supply Cut Hints

Oil prices have risen above $60 a barrel for the first time this year amid signs that industry spending cuts might curb supply.

Brent crude collapsed 60% from a high of $115 a barrel last summer to $45.19 in January, the lowest in almost six years, as a result of oversupply.

Despite the rise on Friday, oil is still down by almost 50% compared with the peak in June.

Analysts at Bank of America Merrill Lynch are predicting Brent average prices will range between $40 and $70 a barrel in the next 18 months.

“A continued build in storage will likely further exacerbate near-term price volatility and keep pressing companies to make capital expenditure reduction decisions that will have long-lasting effects on production,” they wrote in a note.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza