Investment hopes rise as oil price hits $60
The industry has coped with low prices over the past year
Oil prices have risen to their highest for a year, raising hopes of a recovery in activity in the north east economy.
Brent futures edged over $60 a barrel fuelled by cuts in supply and US stimulus measures.
Earlier today Brent crude for April touched an intraday high of $60.06 a barrel, the highest since January last year.
US West Texas Intermediate crude futures for March advanced 65 cents, or 1.1%, to $57.50 a barrel, also he highest since January last year.
Supply cut agreements by Opec and its allies is helping to balance global markets and support prices.
Petroleum economist Alex Kemp of Aberdeen University is hopeful a few investment projects may be given the go ahead if the price rally is sustained.
“It will mean tax revenues are a bit higher and also it will mean that some investment projects which have been put on hold will now be possibly reappraised”, he told Bloomberg.
Brent may yet rise further, depending on actions from OPEC and progress with vaccinations, but, as Professor Kemp said back in December, its evidence of a sustained high price that operators want.
OPEC met last week, deciding to keep its current policy for February and March in place, meaning most countries keep output level, while top exporter Saudi Arabia takes a cut of 1million barrels per day.
Oil majors such as BP and Shell have announced steep losses on the back of a slump in demand caused by the coronavirus pandemic.
Progress on a global vaccination programme is seen as key to re-building the economy.