Oil prices are finally bouncing back. Analysts say that this can be a beginning of a steady increase in the prices. The oil prices went above $60 per barrel recently for the first time since December. The crude oil prices reached all time low on March 17 and the latest growth in the oil prices from $43.39 to above $60 can be viewed as a symbolic gesture by the industry. The oil companies, which have already stopped or lowered its production and exploration efforts, have informed that though this shows a higher chance of profits they are keeping their prices low to fight the competition.
New York Mercantile Exchange trading, a commodity exchange indicated that U.S. benchmark crude increased by $1.47 and reached $60.40 per barrel mark. It broke the record of December 10 when the benchmark reached $60. In the month of June last year, the benchmark was thriving at $107.26.
Managing Director Bill Herbert from Simmons and Company International informed that this development is too small to encourage big industry like oil. The co-head of securities for Huston based firm further added that the service costs have been decreased by 20 to 50 percent in last four months alone. The United States shocked whole oil industry by flooding market with its cheap shale oil production and lowered overall prices. Shale oil production will decrease by this month end as per the data released by Department of Energy. The rig activity, jobs and capital spending is all time low in the oil industry.