The crude glut in the global market seems to be dissipating and supply and demand move back into balance as oil prices jumped above $50 for the first time on May 26 this year.
This is a welcome relief for oil exporting countries, including the likes of crisis-hit Venezuela, as prices have nosedived to $27 a barrel early this year from more than $110 in mid-2014.
Crude had been edging close to $50 for the last two weeks, but a strong dollar caused by rising expectations of a Fed rate hike in the US next month curtailed gains.
A firmer greenback makes the dollar-priced commodity more expensive, hampering demand.
The price rally has been due to a number of factors in major oil producing countries from Canada to Nigeria and Iraq.
Pipelines in Nigeria have been affected by sabotage attacks, while the effects of wildfires are still being felt in Canada and bad weather and power outages, among other issues, have seen production in Iraq fall from record levels earlier this year.
Many analysts believe that the strategy by major oil producers to stifle high-cost suppliers is paying off. This seems to have now almost eradicated the global oversupply, spurring a price rally of 80% since January.
But for major oil-producing and other commodity-focused countries, the latest rebound is too small to bring much of a relief but could cushion some from even greater turmoil. It is likely to trigger sighs of relief among officials in struggling economies such as Angola, Nigeria and Venezuela, along with some big Middle Eastern producers.
Other emerging-market economies hit hardest by capital outflows due to depressed commodity sectors could find their footing.
Analysts also point out that for major energy companies that have been hit hard by the price rout, a recovery at this level is likely not enough to spur new investment, and there are signs that many big international oil companies (IOCs) will continue cutting back into 2017.
Obviously, 50 is a better price than 27, but for IOCs this level is not profitable to resume expensive, long-term projects. They are likely to remain extremely cautious in terms of investment decisions.
According to an analysis, just two significant new developments were sanctioned last year, compared with a normal level of around 15 a year.
This situation is likely to continue this year and in 2017, in which case, it could mark a third successive year of cuts across the global energy industry.
Some analysts believe oil price above $50 could encourage more drilling, especially in the US shale sector, and that this will eventually send prices spiralling down again.
Meanwhile, the global energy industry has its eyes firmly set on the June 2 meeting of the Organisation of Oil Exporting Countries (Opec) in Vienna.
All but one of 27 analysts surveyed by Bloomberg said the Opec will stick with the Saudi-led strategy to accept a lower crude price to defend their market share rather than set output limits when ministers gather in Vienna early next month.