Oil prices are gaining steam on hopes that some of the biggest producers will stabilize production, but that won't do anything for prices, according to one analyst.
Reports suggested OPEC and Russia will meet in March to discuss a potential production cap at January's levels, which are already near record highs.
"Whether there's an agreement ... it really doesn't make much difference," says Spencer Welch, an oil analyst at IHS, based in London. "The market is already oversupplied and if they say they're going to carry on at current levels, that's not going to help rebalance the market."
Brent, the international price for oil, could gain nearly 10% this week, though the closely watched commodity fell 7.6% since the start of the year and 47% over the past 12 months. West Texas Intermediate, the U.S. benchmark for oil prices, fell 14.4% year to date and 45% over the past year.
Welch says the only thing that will rebalance the market -- and ultimately lift prices -- is if a major oil producer cuts production. Earlier this week, Saudi Arabia oil minister Ali Ibrahim Al-Naimi rejected the notion of a cut.
With these factors in mind, Welch says oil prices are likely to stay in a narrow range of between $30 and $35 a barrel, with the possibility of further downside risk. "Maybe dipping below $30, but no significant recovery in the first half of 2016," he says. "Maybe in the second half of this year, IHS expects the market to come back into balance with some increase in demand and some decrease in supply," adding that a slow price recovery may come to fruition later this year.
With low oil prices, Welch says the impacts are balanced -- that is, there are equal winners and losers. Consumers clearly benefit from low oil prices, but the energy sector is hurting. The declines may also cause trouble for banks that lend to energy companies.
"In the sum of things, it might actually be better for the global economy to have a low oil price," he adds.