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Business

Oil tops $50 but for how long?

Opening sequence

Opening sequence

Business

Oil tops $50 but for how long?

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17:44
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COMING UP:Oil tops $50 but for how long?

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Transcript

00:00:00
>> Low prices have been wreaking havoc among oil firms and producers for most of the year. New job cuts at Royal Dutch Shell are case in point. Two thousand, two hundred extra lay-offs were announced on Wednesday, on top of the 10,000 plus already in the pipeline. But prices have been creeping up in recent weeks, and Brent crude has just topped $50 a barrel for the first time in nearly seven months.
00:00:22
>> What did really help the market is totally unexpected outages. Outages are always unexpected so we had Nigeria going up in flames with the militants disrupting pipelines, we had a totally unexpected outage in Canada when fires disrupted oil production. So the market looks a little bit better. Of course a lot will depend on how long these outages will last because if Nigerian production returns back say within the next couple of months and Canada will certainly return back within the next few weeks then we'll end up again in a situation when oversupply is quite heavy.
00:00:59
>> Energy stocks rose as a result, but prices may not go much higher. Certainly few expect to see prices return to their 2015 peak of $100 a barrel, but they won't be $30 either.>> No one is expecting prices to skyrocket anytime soon, people don't think that we'll fall back into the 25, $30 category, so we may be in a situation when the markets will remain sort of boring and wrench bound for the next few months.
00:01:27
Famous last words of course.>> Rising prices will help the ECB though. They've helped lift a gauge of long term inflation expectation in the Eurozone above 1.5%. That's just half a percent below the central banks target.