Thought it had slipped back to $49.74 as of just after 9 a.m., the price of West Texas Intermediate oil earlier in the morning rose beyond $50 per barrel for the first time in seven months.
Gaining on continued momentum the commodity has seen in recent weeks, oil rose 1.1% to $50.09 at 7:47 a.m., USA Today reports.
The price of oil slipped below $30 per barrel in early 2016 as a global glut of production cratered pricing, triggering bankruptcies of U.S. exploration-and-production firms and deficits in oil-rich countries.
A steady contraction in production among cash-strapped U.S. producers and a corresponding slide in inventories have fueled a rebound. the massive wildfire that undermined Canadian oil production in recent weeks also has helped.
“We believe the market has returned to balance in May, with the fundamental correction accelerated by supply disruptions,” Jefferies analyst Jason Gammel says in a research note. “For the first time in two years we expect that there is more upside than downside in our flat oil price forecasts.”
There are no expectations of the rebound sustaining its momentum for much longer. Capital Economics analysts project the price of Brent crude, the global benchmark, which closely tracks WTI, would fall to $45 by the end of 2016. It predicted prices of about $60 in 2017.
