Major OPEC producers are privately starting to talk about a new oil price equilibrium of $50 a barrel, adding to signs that the market’s long, deep rout is officially over, says one of the industry's leading prognosticators.

Gary Ross, the founder, executive chairman and chief oil soothsayer at New York-based consultancy PIRA, told clients 2-1/2 weeks ago that he reckoned the “lows are in” for crude, which was then about $30 a barrel. U.S. futures have rallied since then to close at nearly $36 on Friday, with a handful of analysts also cautiously calling a bottom.

In an interview with Reuters, Ross said oil should recover to $50 a barrel by the end of the year, potentially aided by eventual supply cuts from leading producers among the Organization of the Petroleum Exporting Countries (OPEC).

“They want $50 oil, this is going to become the new anchor for global oil prices,” said Ross, one of the industry’s most respected forecasters for his bold price predictions and decades-long history of consulting with OPEC members.

“While it may not be an official target price, you’ll hear them saying it. They’re trying to give the market an anchor.”

If Saudi Arabia and other powerful Gulf OPEC members begin invoking $50 as “fair price for producers and consumers” – a once-favored phrase that has been absent for several years – it may could signal the end of an unusual and extended period in which the group abandoned efforts to manage the market.

After years of signaling satisfaction with prices hovering at around $100 a barrel, top exporter Saudi Arabia in late 2014 led OPEC in its most dramatic policy shift in decades. No longer would the world’s top oil exporter, or its OPEC allies, agree to cut their own production to support such high prices, which they feared would erode their share of the world market.

Instead, they would keep pumping and allow prices to fall. While they did not anticipate the longest and deepest oil price rout since the mid-1980s, the effort has at last begun to curb the rise of rival higher-cost producers such as U.S. shale drillers, another sign that prices may have found a bottom.

In his note to clients, Ross also pointed to the recent agreement between major OPEC members and leading non-OPEC producer Russia to “freeze” production at January levels as a factor boosting market sentiment after a brutal period when the only safe trade seemed to be sell.

The pact will do little to curb immediate oversupply, especially with Iran exports still swelling after the end of sanctions. Still, working together on “verbal intervention” was a positive start that “could lead to eventual cuts” after a period in which Saudi Arabia and Russia made little effort toward any kind of cooperation, he said.

“Russian production is going down anyway, why not agree to a freeze and then cuts?” Ross told Reuters.

The $50 figure was in line with analysts’ consensus for 2017 U.S. prices, according to the last Reuters poll, although much higher than the $38 a barrel median for this year.

Ross, whose forecasts are not normally made public, was among the few analysts to anticipate OPEC’s decision to let prices fall in 2014.

While he was wrong-footed in the first part of last year, when crude’s rebound to around $60 a barrel proved temporary, he joined others such as Goldman Sachs in taking a much more bearish view in more recent months, predicting in December that U.S. crude would drop below $30 a barrel in February.

Ever since the market detached from the $100 a barrel figure that anchored it from 2010 to 2014, analysts, traders and executives have struggled to pinpoint where it might ultimately settle, agreeing only that it would be a period of extraordinary volatility in the absence of any overt OPEC guidance.

Officials from less influential members such as Venezuela or Angola have occasionally referenced specific prices, generally in the vicinity of $70 to $80, but the bigger Gulf producers have largely avoided any public mention of a new reference point, leaving the market adrift.

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