Oil refinery

Oil prices have hit $40 per barrel for the first time in 2016 as commodity prices experience somewhat of a recovery.

Having fallen as low as $28 per barrel during January, Brent Crude oil rose 5% to trade at $40.83. Although it is still 70% below its mid-2014 peak of $115, prices are up 40% on their January lows.

With optimism around the Chinese economy growing, iron prices also jumped 20%.

Many economic analysts have attributed the recent uplift in prices to efforts made by oil-producing nations to reduce production. In February, some of the world's biggest oil producers - Saudi Arabia, Venezuela, Qatar and Russia - agreed in principle to freeze production, as long as other nations agreed to do the same. More official talks take place in Moscow this month.

Brent crude prices Image: Nasdaq

The collapse of oil prices has been blamed on over-supply. Oil producers, led by Opec (Organization of Petroleum Exporting Countries), had continued to increase production since the summer of 2014, first prices first started to fall. And with slowing demand around the world, driven by a major shift in economic policy in China, far too much oil was being produced but not used.