By Yemisi Izuora-Lagos
Key industry analysts say the oil price has bottomed out, even as Opec assures that real recovery will happen towards the end of 2015
Oil prices jumped by 2 per cent overnight(Tuesday), bringing up the cost of Brent crude by more than $1 per barrel to $62.64, but the gains come as Saudi Arabia’s oil minister confirmed that there would be no cut in production despite the recent dramatic decline in oil prices.
Saudi oil minister, Ali al-Naimi, said in Abu Dhabi that “The kingdom of Saudi Arabia and other countries sought to bring back balance to the market, but the lack of cooperation from other producers outside Opec and the spread of misleading information and speculation led to the continuation of the drop in prices.”
According to al-Naimi, if producers outside Opec want to cut production “they are welcome, but we are not going to cut; certainly Saudi Arabia is not going to cut.”
In spite of al-Naimi’s hard line, the overnight jump in the oil prices has given most major European stocks a lift.
All the major European stock markets are up yesterday (Wednesday) as energy companies make gains.
The FTSE 100 has increased by 64 points to 6610, led by BP (up 2.2 per cent), Royal Dutch Shell (up 2.7 per cent) and Tullow Oil (up 2.5 per cent).
According to Stan Shamu, an analyst at UK stockbrokers IG Markets, some investors believe that oil prices could continue their upward trajectory.
“After seeing a rebound on Friday (Last week), many have been calling a bottom in oil prices and feel this is a beginning of a recovery.”
Opec’s Secretary-General Abdullah al-Badri told Reuters that he hoped to see a recovery in the price of oil by the second half of 2015.
“We hope the price would rebound by the end of the second half of 2015,” he said. “We can’t see the market now, we have to wait until the end of the second half of 2015 to see how the market will react to these low prices.”