Jan. 20 (UPI) — A slight gain in the Chinese economy followed by a week of data supporting market balance sentiments lifted crude oil prices early Friday.
Crude oil prices moved in volatile territory for much of the week, with full percentage increases followed by corresponding decreases the following session. Markets moved in wide swings in response to market reports from the Organization of Petroleum Exporting Countries and the International Energy Agency.
Both reported some tightening in a market where oversupply last year dragged oil prices to historic lows. While OPEC coordinates a balanced approach in the first half of the year through managed production declines, China reported its economy grew 6.8 percent during the fourth quarter, slightly better than expected.
OPEC’s production move and slow Chinese expansion could add support to a tightening between global supply and demand. The price for Brent crude oil was up about 1.7 percent about an hour before the start of trading in New York to $55.11 per barrel. West Texas Intermediate, the U. S. benchmark price, was up 1.5 percent to $52.93 per barrel.
Ning Jizhe, the head of the Chinese National Bureau of Statistics, was quoted by the official Xinhua News Agency as saying growth was the slowest it’s been in a quarter century, but still likely to top all other major economies.
“We should be aware that the domestic and external conditions are still complicated and severe, and the foundation of the economic stabilization and improvement is not solid yet,” Ning said.
Ning’s comments come as Donald Trump takes the oath of office to become the next U. S. president. Trump has locked horns with China over the status of Taiwan, an issue that Beijing said is a direct assault on its sovereignty.
On sector specifics, the market could be influenced later in the day when oilfield services company Baker Hughes releases weekly data on exploration and production worldwide. Gains in North America could be indicative of a U. S. shale oil sector rising in response to the increase in crude oil prices that accompanied OPEC’s managed decline.
Tamas Varga, an analyst at broker PVM, said in an emailed report that push-pull could be a factor when trying to bet on the trajectory for future crude oil prices.
“It looks as though the market is torn between the reportedly good compliance of OPEC and non-OPEC producers and the expectations of a significant increase in U. S. shale oil production,” Varga said.