NEW YORK, Jan. 19 (UPI) -- Crude oil prices recovered some lost ground in early Tuesday trading as market reality set in on Iran, though long-term pessimism remains.
Crude oil prices moved lower in Monday's session, which was lightened because of the federal holiday in the United States. Trading Tuesday resumed in full for the first full-day of activity since so-called Implementation Day was declared for Iran.
With sanctions pressures easing, Iran said it could add about 500,000 barrels of oil per day to a market that's presently oversupplied. Iran's oil minister, Bijan Zangeneh, said the market has already "calculated Iran's return," however.
Brent crude oil prices shot up 2.1 percent in early trading to recover to $29.56 per barrel in New York. West Texas Intermediate, the U.S. benchmark for crude oil prices, gained only 0.6 percent to $29.62 per barrel.
Oil dipped below $30 per barrel for the first time in roughly a decade on Jan. 15 on heightened concerns about the pace of growth in the Chinese economy. The Chinese National Bureau of Statistics reported the economy grew at 6.9 percent last year for its slowest rate in 25 years. Despite the weakness, NBS boss Wang Baoan said growth was "within a reasonable range" and in line with the official 2015 target of around 7 percent.
In an update to its World Economic Outlook, meanwhile, the International Monetary Fund said the situation in China was playing out as expected, though parts of the economy were slowing more quickly than envisaged.
"These developments, together with market concerns about the future performance of the Chinese economy, are having spillovers to other economies through trade channels and weaker commodity prices, as well as through diminishing confidence and increasing volatility in financial markets," the IMS said.
Global economic growth was downgraded by the IMF, as were the economies of major oil exporters Brazil and Saudi Arabia.
Describing the supply side of the market as "bloated," the International Energy Agency added the growth in demand for oil flipped from a five-year high in third quarter 2015 to a one-year low in the fourth quarter to 1 million barrels per day. The IEA said growth for 2015 was moderate at 1.2 million bpd.