That Sound Could Be Oil Hitting Bottom
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Stockbyte/Thinkstock(NEW YORK) — Has the price of oil finally hit bottom?
After seven straight months of falling costs, concerns about production cuts could lead the market to do a U-turn. That may mean higher gasoline prices in the coming months.
The national average may rise as much as 10 cents a gallon by Valentine’s Day, says Patrick DeHaan, senior petroleum Analyst at GasBuddy.
Oil companies stopped production at nearly 100 U.S. rigs last month, and “major producers such as Royal Dutch Shell and ConocoPhillips have slashed billions of dollars from their investment programs,” reports The Financial Times.
West Texas and Brent crude have bounced back nearly 1 percent since last Thursday.
The price of oil may have halved since its high last year, but it has bounced so strongly over the past two days that it has technically climbed into bull market territory, often classified as a jump of 20 percent from the cyclical low.
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