As oil prices have climbed back to and above the $40 mark here in April, and several analysts believe it will see further significant gains as 2016 progresses.
The West Texas Intermedia crude index' surpassed its 200-day moving average on Tuesday for the first time since July 2014, which Amherst Pierpont strategist Robert Sinche said was a significant hurdle for crude oil to clear and a sign that very cheap oil is well behind us.
"We had a double bottom in oil back in February. We've had a good rally," Sinche said. "It stopped a couple of times around this 200-day moving average. This could be the breakout.
"We're kind of into a new regime here for oil prices as we go forward, maybe moving up into that higher $50-70 range that many of the oil analysts are telling us we should be seeing by the end of the year," he added.
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After hitting $42 on April 13, WTI Crude Oil dipped to just above $40 as of Friday morning. ahead of Sunday's meeting between Saudi and Russian oil producers in Qatar. There, top exporters will discuss freezing output around its current level as a means of curbing excess supply that caused the massive drop in prices starting in June 2014.
"Momentum is building behind an agreement that likely excludes Iran (and potentially Libya). While there will likely be little effect on the physical market an agreement would represent an important psychological shift in setting oil prices," investment bank Jefferies told Reuters Friday.
However, some analysts believe an output freeze as a result of the meeting is an overly-optimistic hope.
Even at, say, $60 per barrel, oil would still be a far cry from the $104 level it was before the drop began, but it would be a massive boost to the industrial distribution and manufacturing sector, as many companies have customers tied to the oil & gas market. Cheap oil has been the leading cause of overall weakened product demand and industrial recession. WTI Crude Oil reached a 13-year low of $28 per barrel in both January and February.