{"id":13256,"date":"2015-04-22T16:37:59","date_gmt":"2015-04-22T21:37:59","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=13256"},"modified":"2015-04-22T16:37:59","modified_gmt":"2015-04-22T21:37:59","slug":"oil-price-rebound-continues-despite-boost-in-oil-supply","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/oil-price-rebound-continues-despite-boost-in-oil-supply\/","title":{"rendered":"Oil price rebound continues despite boost in oil supply"},"content":{"rendered":"

By Lucy Ren<\/p>\n

Oil prices rose slightly on Wednesday despite a government report showing a spike in oil supply in the U.S. in the most recent week.<\/p>\n

U.S. crude inventory rose by 5.3 million barrels to 489 million\u00a0in the week ended April 17, marking the highest level of supply in at least the last 80 years, according to the Energy Information Administration report<\/a>. Oil inventory has risen\u00a028 percent since January,<\/p>\n

Analysts differ on the long-term outlook for oil prices.<\/p>\n

<\/p>\n

Prices have been rebounding by close to 30 percent since March 17, when they closed at a six-year low of $43.46 a barrel.<\/p>\n

Dave Nadig, chief investment officer of the analytical website ETF.com, said he does not foresee any significant upward pressure on prices in the next three to four years.<\/p>\n

\u201cEssentially what we are in is an oversupply alignment of oil,\u201d he said. \u201cIf anything, supply is going to keep prices down.\u201d<\/p>\n

But analysts are keeping a close watch on shrinking investment in oil production in response to the drastic decline in oil prices. Since June 2014, West Texas Intermediate crude oil futures have been cut by more than half, closing Wednesday at $56.26 per barrel.<\/p>\n

[field name=”oil inventory”]<\/p>\n

The supply spree has been contradicted by the consistent decline in oil rigs for 19 consecutive weeks, according to U.S. rig counts conducted by Baker Hughes Inc<\/a>., an oilfield services company that provides weekly counts of U.S. and Canadian drilling activity. The number of oil-drilling machines fell to 734 from 760, the lowest level since November 2010.<\/p>\n

Nadig opined that traditional measurements of oil rigs like the Baker Hughes rig count no longer apply. \u201cThe rigs that are running are running at rates they\u2019ve never been run at before,\u201d he said, \u201cand drilling efficiency skyrocketed in the last couple of years.\u201d<\/p>\n

However, Phil Flynn, an\u00a0analyst at the Price Futures Group in Chicago, sees more momentum in the recent oil price rebound.<\/p>\n

\u201cIn the last two months, companies have announced billions of dollars of capital spending cuts,\u201d Flynn said. He expects \u201cbigger holdback on investments\u201d in the oil industry, which will further tighten the supply and drive up prices \u201cnot just today but in years to come.\u201d<\/p>\n

Photo at top: U.S. oil rig count has been falling for 19 consecutive weeks, according to Baker Hughes Inc. (TexasRaiser\/Creative Commons<\/a>)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Lucy Ren Oil prices rose slightly on Wednesday despite a government report showing a spike in oil supply in the U.S. in the most recent week. U.S. crude inventory rose by 5.3 million barrels to 489 million\u00a0in the week ended April 17, marking the highest level of supply in at least the last 80 […]<\/p>\n","protected":false},"author":29,"featured_media":13258,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,436],"tags":[],"class_list":["post-13256","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-spring-2015"],"yoast_head":"\nOil price rebound continues despite boost in oil supply - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/oil-price-rebound-continues-despite-boost-in-oil-supply\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil price rebound continues despite boost in oil supply - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Lucy Ren Oil prices rose slightly on Wednesday despite a government report showing a spike in oil supply in the U.S. in the most recent week. 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