A year on from the start of one of the biggest oil price crashes in history, the driving force behind the slide remains intact: there is still too much crude. Hayley Platt looks at the impact.
This time last year Brent crude futures were around 116 dollars a barrel. By January they'd hit a six-year low of 45 dollars - in one of the biggest price crashes in history. It's been a big blow to the industry - Norway's Statoil was the latest to announce 1,500 job cuts. But it's had a positive impact on many economies, says JP Morgan's Kerry Craig. SOUNDBITE: Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management, saying (English): "We're seeing not a lot of wage growth in the US and the UK and around Europe but now we have a case of saying that inflation is actually being held down to a large extent because of the oil prices. That means that real wages are positive, that's helped the consumer, that's boosted consumption and growth in many parts of the developed world and certain parts of the emerging world." Prices have since recovered by around a third. Brent crude is currently at 62 to 63 dollars a barrel. The problem is there's too much of it. US production has surged as it turns to shale oil. Iran could be about to re enter the market if sanctions are lifted. And the oil cartel OPEC shows no sign of cutting production. SOUNDBITE: Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management, saying (English): "I think the overriding factor in this is Saudi. If you look at what they're saying in their last meeting was that they're very comfortable with where production is. They've moved away from thinking about price and they're thinking about market share. They continue to want to grab that market share from the US." The U.S Energy Information Administration thinks oversupply with last until at least 2017. Others see it as permanent and China could be key. It's oil imports have been near record highs for over six months due to demand for new cars and a government decision to boost reserves. But that may not last - the world's second largest economy is growing at its slowest pace in a decade.