The International Petroleum Week, hosted in London, is an excellent opportunity to gauge the standing of the oil industry, with traders and executives making the trip from around the world. Only a year ago, the event boasted a somber mood, as oil prices hovered around $35 a barrel; this time around, the mantra of “lower for longer” has been replaced by “wait and see”.
Crude prices may have risen on a very narrow path, with the international benchmark Brent sitting between a $53 and $58 range, but there are still skeptics out on the horizon. Analysts from Citi, who were in attendance, see the potential for $70 a barrel by the end of the year, citing heavy profit-taking by hedge funds on massive shorts.
If anyone in the industry had a great time during the price crash, it was the oil traders. Through a method called a “carry-trade”, which involves buying cheap, physical oil and storing it until prices recover, they reaped the benefits of increased volatility. Though volatility seems to be waning and prices are on the rise, some of the world’s biggest oil companies are looking to get into the game or expand their current operation.