One thing that oil producers congregating in Davos agree on is that the oil rout can’t go much further. There’s less consensus about when the recovery will arrive.

From nations such as Kazakhstan and Saudi Arabia, to top trading houses like Mercuria Energy Group Ltd., delegates at the World Economic Forum generally concur that the global glut will begin to dissipate this year as the lowest prices in 12 years force cuts in spending and production. Even Nouriel Roubini, the economist dubbed “Dr. Doom” for predicting turmoil before the 2008 financial crisis, believes prices will recover in 2016, according to Bloomberg.

"We are reaching the bottom of the oil market,” Mercuria Chief Executive Officer Marco Dunand said in an interview on Friday. "Oil producers are strained to the limit and some of them are pumping at a loss."

The guardedly optimistic tone was in line with price movements in oil markets on Friday. Brent futures rallied 6.7 percent, capping their biggest two-day advance since August.

Cheap Oil

Kazakhstan, while braced for the risk that crude will hit $20 in the first six months of 2016, expects a recovery to $30 to $40 a barrel in the second half, Prime Minister Karim Massimov said in an interview. Still, the “era of cheap oil” could persist for another five to seven years and the Central Asian country is prepared to withstand a drop to $16 a barrel, Massimov said.

The qualified optimism expressed on Friday echoes views aired on Thursday by Azerbaijan, Nigeria and Saudi Arabia at an energy-themed discussion.

Executive Caution

Most of the oil executives and representatives of energy-rich nations who met in a closed session in Davos on Thursday agreed the market was oversupplied by about 1 million barrels a day and that lower spending on new projects would bring supply and demand into balance next year, according to one of the participants who asked not to be identified because the meeting was private.

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