Not long to $50.I think the only question now is whether OPEC will be happy with $50. I tend to think they will not. I believe they'll vote for a further temporary reduction of say 3%.
A number of factors:
1) They've now seen that shutting in more supply will benefit them - as weekly stock are dropping. It took a huge cut in production and quite some time, but they see that it is working. The problem is that the stocks are still very high and so the price is only slowly risiing. If they can quicken the pace for a few months, the price should rise to $60. Then they can turn supply back on if price jumps over say $85. I believe they, and the rest of the world want to see stable prices in the future - and OPEC can keep prices high enough but not too high for the next several years. The reason for the speculation starting in 2007 and ending last summer, was that there was not enough shut-in capacity in Saudi and the rest of OPEC to meet projected growth - taps were on full and it didn't look like there was going to be enough (which led to wild speculation). That won't be an issue for some time
2) Economic problems in the US haven't affected fuel consumption nearly as much as predicted. Gasoline use is actually up YOY from last year.
3) It must bother OPEC that US is essentially transferring oil from the ground under them to the SPR (under the US) for bargain prices, especially since they've laready cut production by 9%.
4) They have to expect that as the price goes back up - some of their members will start to cheat on quotas - and if supply starts growing again, the price will drop back to the $30s. To protect against it they need to reduce supplies faster now.
This is huge for Banker's - as the reason this thing dropped from $4 to under $1 was that no-one believed they could get enough money to keep developing - without financing and that meant a secondary offering.. The rise in Oil not only gives them significantly more cash flow from sales, but at $52 sustained (not sure what the terms of the 'sustained price were' they get access to all the capital they need.
As I said ahile back - those that see the rise from 65 cents to $1.60 as a big jump, either weren't around, or have forgotten that this thing was well over $4 only 8 monthhs ago. They are in a far better position now then they were 8 months ago.