Oil closed up for a second straight week on Friday after another drop in the US rig count, and Brent crude hit a 2015 high above $60 a barrel, but market skeptics cautioned the rally could fade because supplies keep coming.
Many traders and analysts believe there is a global oversupply of nearly two million barrels per day of crude oil. They say little has changed fundamentally to explain the price rebound of the past two weeks, agencies.
The number of oil drilling rigs in the United States fell this week to its lowest since August 2011, data showed on Friday. But the market’s reaction was relatively tepid compared with the past two weeks when prices spiked on declining rig counts.
“I think people are starting to understand to a certain point that, even if rig counts go down, it’s not going to affect production in the short term. It’s going to take a few months for that to happen,” said Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York. US crude inventories have swelled to record highs of nearly 418 million barrels.