Oil prices are reversing trend?

(Baonghean.vn) - Supply disruptions have pushed Brent crude oil prices to a six-month high, fueling speculation about the looming end of the downward trend in oil prices that has caused many commodity economies around the world to struggle.

Oil prices hit a 6-month high today. Photo: Reuters.

A massive fire that broke out around the Fort McMurray oil sands mine in Alberta, Canada, is rapidly spreading north, forcing tens of thousands of people to evacuate mining sites around major oil sands projects.

At the same time, the Nigerian military arrested a group of people linked to an attack on an offshore oil facility, while the government sought to negotiate a deal with union leaders to contain a potentially disastrous strike against rising oil prices.

Goldman Sachs' report also forecasts a short-term supply shortage due to declining production in countries like Nigeria and Venezuela, which are struggling with crises.

News of falling supplies sent global stocks higher on May 17, benefiting energy companies.

Reverse trend?

“People are looking for any signs that supply is falling, so any news of an unplanned shortage is very exciting,” said Peter Lee, an oil and gas analyst at BMI Research. “There is a very good chance that oil will rise above $50 in the next few days. In the second half of the year, oil could stay in the $45-$50 range.”

Other industry observers, however, are reluctant to call the oil rally a sustainable recovery, pointing out that oil is still “flooding” the market.

“Admittedly, these supply disruptions are large enough to warrant a rebalancing in the second half of the year,” said research firm Capital Economics. “However, prices could fall back quickly once at least some of these supplies are restored. And then the stock market will remain largely unchanged.”

Thao Linh

(According to DW)