The latest forecast indicates 50 percent rebound in oil prices by the end of 2016. The oil price could be higher by $15 per barrel this year taking the New York crude to $46 a barrel by fourth quarter and Brent to $48 during the same period. The drop in US shale output is likely to drive oil price up in the second half of 2016.
The skyrocketing oil inventories are paving the way for more traffic jams on the seashores as oil tankers are queuing up along the US Gulf Coast. The uncompromised Opec's decision to continue its production level coupled with shale production in the US is adding to huge volumes of inventories.
The US Energy Information Administration (EIA) has lowered outlook for the US crude production in 2016. EIA has reduced the forecast for 2016 by one percent in the US oil production.
The oil price surged to one-month high at $47.31 a barrel on New York Mercantile Exchange (NYME). Oil futures reached $48.09 indicating its highest since 31 July. The rebound in oil prices was mainly due to two factors.
Brent crude oil rose on Wednesday as strong demand and falling stockpiles in the United States pushed prices higher.
A year on from the start of one of the biggest oil price crashes in history, the driving force behind the slide remains intact: there is still too much crude.
German bond yields hit 1 percent for the first time since September on Wednesday as long-term inflation expectations rose, although recent rollercoaster moves in fixed-income markets kept stock markets flat.
Oil fell nearly 3 percent on Wednesday as traders and investors ignored a fifth straight weekly decline in U.S. crude stockpiles to focus instead on a big build in distillates, including diesel, as the peak season for U.S. road travel gets under way.
Oil prices recovered on Thursday after a two-day slide as the dollar weakened, making fuel less expensive for holders of other currencies.
Oil prices fell by up to 3 percent for a second straight day on Wednesday as a resurgent dollar weighed on the market amid concerns that U.S. crude supplies may have started rising again after three weeks of draws.
Oil prices rebounded on Wednesday, with U.S. crude snapping a five-day decline, after another weekly inventory draw but gains were still limited by a huge supply overhang and concerns about a stronger dollar.
Crude oil prices bounced back on Wednesday from steep falls in the previous session as industry data showed that U.S. crude stocks fell more than expected last week.
Oil prices fell after initially rallying on Wednesday as worries about huge supplies weighed on the market despite a second straight week of draws in U.S. crude.
Oil rose 3 percent on Tuesday, the most in three weeks, as a weak dollar lifted commodities denominated in the currency and OPEC raised slightly its forecast for world oil demand growth.
Crude oil futures rose on Tuesday on signs of falling U.S. oil production, weakness in the dollar and tensions in the Middle East, particularly Yemen.