NEW YORK, Jan. 8 (UPI) -- Crude oil prices opened flat to slightly higher to cap off a week of steep declines as Chinese stock markets closed Friday without a hitch.
A so-called circuit breaker twice shut down trading early this week after the benchmark Shanghai Composite Index lost around 7 percent of its value. The government abandoned the emergency switch after trading Thursday, seemingly putting an end to panic sell-offs.
The Shanghai Composite closed Friday up about 2 percent. Justin Yifu, a former economist with the World Bank, was quoted by China's official Xinhua News Agency as saying the Chinese economy was in a state of transition and still has internal structural problems.
"However I think the deceleration since the beginning of 2010 is mainly due to external and cyclical issues," he said.
Compared with successive days of declines of more than 2 percent, crude oil prices staged a rally at the opening of trading in New York. Brent crude oil gained about 0.3 percent to start the day at $33.85 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, gained 0.4 percent to trade at $33.39 at the open.
Crude oil prices are off about 70 percent from June 2014 as the surplus of production is too much for the global economy to accommodate. The sustained slump has put downward pressure on some major economies like Russia's and Saudi Arabia's, which depend heavily on oil for revenue
"Unlike in previous cycles, oil prices this time around are expected to stay low for long," she said. "Indeed, futures markets point to only a modest recovery of prices to about $60 by 2019."
Some positive support may come from U.S. labor figures, which show hiring remains robust despite lackluster economic growth. The unemployment rate in the country is holding steady at 5 percent.