NEW YORK, Jan. 22 (UPI) -- Assurances about the pace of economic growth spilled into Friday trading, giving crude oil prices a major lift, though Iran may emerge as a short-term factor.
Crude oil prices started Thursday trading lower, but lifted after markets reacted to a mixed statement from the European Central Bank in inflationary pressures and future growth projects. Oil extended the rally into Friday, with Brent surging more than 5.5 percent in New York to start the day at $31.16 per barrel. West Texas Intermediate, the U.S. benchmark for the price of crude oil, moved up 5.8 percent to start trading at $31.23 per barrel.
Oil prices have been hammered by growing concerns about the pace of economic growth in China, the world's No. 2 economy. Speaking from the World Economic Forum in Davos, Switzerland, Chinese Vice President Li Yuanchao said that, despite a modest slowdown, the nation's economy was still outperforming many of its peers.
"Despite the volatility in the world economy, China still achieved an increase in gross domestic product of over $500 billion [in 2015], which is estimated to be the largest in the world," he said.
Markets may react later to the influx of an extra 500,000 barrels of oil per day from Iran, which could pressure a sector already flush with crude oil. Genscape, which monitors crude oil traffic, said about 29 million barrels of crude oil have left the Iranian market already this month. An Iranian crude tanker bound for South Korea left port this week.
Oil services company Baker Hughes, meanwhile, reported mixed activity in the North American upstream sector. Canada added 61 rigs, an increase of 37 percent, compared with the week ending Jan. 15. The United States lost 14 rigs, or 2.1 percent, from last week.
Energy companies are spending less on upstream, or exploration and production, as lower crude oil prices starve them of capital. Oil service company Schlumberger said this week there were few short-term prospects for a sector recovery, announcing it would trim about 10,000 from its payroll.
Despite Friday's rally, crude oil prices have returned only to levels from the start of last week. Brent crude oil is off 14 percent since the start of the year.