Qatar energy minister says oil prices have bottomed out

The one commodity with the most worldwide economic and political influence is unarguably the “black gold”. About 57% of its assets is allocated to energy, equipment and services while oil, gas and consumable fuels account for the remainder.

Oil prices are on course for one of the biggest weekly gains in six years as rising geopolitical tensions and signs of slowing output brought buyers back to the market. There are a few reasons why $50 oil might be here to stay.

This outlook will be underpinned by sustained USA and India growth momentum, continued recovery in Europe and Japan as well as a moderate, rather than sharp slowdown, in China.

T. Boone Pickens appeared on CNBC earlier this week to reiterate his take on oil.

Oil prices climbed to their highest in three months on Thursday after a closely watched oil forecaster predicted prices would climb to $75 over the next two years, adding to early gains notched after worries about Russia’s military intervention in Syria.

“In the current circumstances, the global oil market could continue in an unstable situation, where there is a lot of uncertainty with the lack of a market anchor”, Muhanna, an adviser to the Saudi oil minister, told a closed-door energy event in Kuwait on Wednesday.

US inventories expanded by 3.07 million barrels through October 2 as production rose and refinery processing rates fell, according to government data.

I thought supply from the United States would go down-and it has.

“On a more fundamental note, it also seems that the market has caught on (about) the decline in USA crude production”, he said. You can’t get rich selling anything for less than it costs to maintain the country.

The tightening market balance comes as US production starts to decline. This has clouded the political climate in the Middle East, raising the risk of oil supply disruptions in the region.

Meanwhile, regime troops, backed by Lebanon’s Hezbollah, pressed a “vast offensive” against rebels in the war-torn country’s west. The missiles were thought to be among a salvo fired on Wednesday from Russian warships in the Caspian as part of a 9-day-old air war targeting foes of President Bashar al-Assad.

The group has repeatedly refused to cut – and has often exceeded – its production ceiling of 30 million barrels a day, however, showing that it is ready for a fight to defend its market share from shale oil producing newcomers in the west. If the country ever settles down, the Iraqis will have a major say in world prices. The Energy Information Administration admonition and OPEC and the global Energy Agency all are coming to the conclusion that this historic capital retrenchment will change the complexion of this market going forward.