Oil Prices Rebound on ‘Flimsy’ Grounds
PARIS — A recent rebound in oil prices is built on flimsy foundations, the International Energy Agency warned Friday, with another sharp fall possible and few signs that cheap fuel was giving growth a real boost.
Oil prices plummeted by 60 percent between June and January, but have since come off six-year lows and stabilized somewhat, with London’s benchmark Brent trading around $60 per barrel and WTI in the United States fluctuating around $50 per barrel.
“Behind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly,” said the Paris-based IEA, which advises energy consuming nations.
It noted that a key driver in the recovery in oil prices, with Brent being up by 30 percent from the lows it touched in January, has been drops in the number of rigs drilling for shale oil in the United States. – AFP