Oil prices recover to 4 month high

Brent crude oil has gained $9 since March.

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By :  ,  Financial Analyst

Oil prices continue to recover with the latest figures showing a four-month high.

Ongoing concerns over disruption to supplies from the Middle East has propped up the price of Brent crude oil. It currently stands at $65.37 (£42.91) per barrel, an $9 increase from March and a significant boost for companies and countries which rely on a resilient oil and gas market.

Despite the boost in price, major oil companies such as BP, Shell and Exxon Mobil are expected to report drops in first quarter earnings. One of the defining factors behind this rise in oil has been a slowdown in US shale oil production and the conflict in Yemen. The country is not a big oil producer but it is key in term of logistics.

Oil producing nations use the Gulf of Aden, on Yemen's southern coast, to ship oil along the narrow straits of Bab el-Mandeb between Yemen and Djibouti. The recent fighting could have the potential to create log jams in delivery.

Michael Hewson, chief market analyst at CMC Markets, said: "Overall we are in an upwards trend and we do appear to have found a short-term base. There's a good chance we could see $70 a barrel [for Brent] over the course of the next month or so."

Movement in the oil market

There has been considerable movement on the corporate side in the oil and gas market. Royal Dutch Shell announced in early-April that it had agreed to purchase exploration firm BG Group in a deal which values the business at £47 billion.

The agreement, which could be the biggest of 2015, will see Shell pay in a cash and shares offer providing investors with a 50 per cent premium on BG Group's share price as of April 7th, which stood at 1,293.5p at the time.

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