Oil Prices Break $50 Barrier
World oil prices have just passed a key milestone on their long journey out of the doldrums, hitting $50 for the first time in seven months.
The big milestone happened earlier than many expected, fueled by major supply outages that wiped out production in Nigeria, Venezuela and facilities in Canada being disrupted by major wildfires.
Both U.S. and Brent crude prices climbed back above $50 a barrel early on Thursday following a report showing that U.S. crude stockpiles had fallen by more than expected. For WTI oil, it’s the first time above $50 a barrel since October and leaves it an incredible 93% above its February low of $26.05. That ultra-low price was the weakest in nearly 13 years and set off alarm bells around the world, causing global stock markets to plunge.
While the recovery to $50 is good news for oil companies like Chevron () and countries like Nigeria that depend on oil revenue, prices are still painfully low. Crude was well above $100 a barrel as recently as two years ago.
“Remember, $50 was the number where a lot of producers began to panic and bleed deep, deep red ink,” said Tom Kloza, global head of energy analysis at the Oil Price Information Service. “This is not a renaissance. It’s still dark ages for an awful lot of producers.”