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Business

$49 a barrel: is oil glut over?

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Opening sequence

Business

$49 a barrel: is oil glut over?

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COMING UP:$49 a barrel: is oil glut over?

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00:00:00
>> Oil prices are on a remarkable rally of 82% in 82 days. And that's gonna have a dramatic effect for developed economies in major consuming nations like the UK and cities like London which benefits from lower oil prices boosting the economy. I'm Andy Critchlow and I'm Associate Editor at Reuters Breakingviews The oil looks like it could be coming to an end.
00:00:24
You have an increase in demand which is partly been created by lower oil prices. But also, more worryingly, you have supply disruptions which is really the major driver for this valley at the moment. See have question marks over major producing countries like Nigeria, Venezuela, Iraq Libya, and that's weighing on sentiments.
00:00:45
I think investors are being caught by surprise. I mean, we've had major oil producers like BP telling us that we're in an environment of lower for longer that's gonna last for maybe two, three years. Now that's starting to be questioned. $50 a barrel, if we go across our threshold in the next few days.
00:01:04
That is certainly a watermark that would have been breached, and the next stop is $60 a barrel. Could we forcibly be back in the hundreds by the end of the year? It's not impossible.
SOUND] T
e risk from higher oil prices is really on what that means for energy costs.
00:01:23
So consumers say in the UK are benefited certainly for the last year on petrol prices at the pumps around 1 pound per liter. Those petrol prices are now going up. So that's gonna hit people's pockets, and the knock in consumer spending, which is gonna effect the economy here in the UK.
00:01:41
And that trend, you're gonna start to see all over the world if this rally in oil prices continues.