NEW YORK, Jan. 26 (UPI) -- Crude oil prices started Tuesday in volatile territory after giving up recent gains, but held above $30 per barrel amid modest signs of economic optimism.
Crude oil prices rallied 9 percent in Friday trading after investors took the latest sentiments from the European Central Bank as a potential sign of tepid but steady regional growth. Oil gave up most of those gains in Monday trading and dipped briefly below $30 per barrel in overnight trading.
Concerns about the pace of growth in the Chinese economy dragged on world stock indices and crude oil prices during the first few trading sessions of 2016. Crude oil prices are down about 10 percent for the year.
Chinese President Xi Jinping called on policymakers to deliver specific structural reform plans to make higher quality goods at a lower cost. Though Chinese growth is within policy objectives, last year's 6.9 percent increase in gross domestic product was the slowest in a quarter century.
In the United States, the much-watched S&P/Case-Shiller composite showed U.S. home prices increased 5.8 percent year-on-year in November in a sign the U.S. economy was pulling away from some of the weaknesses that contributed to the last recession.
"Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market," Managing Director David M. Blitzer said in a statement.
Crude oil found modest support in early morning trading, with Brent increasing 1.5 percent to $30.96 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was up 1.5 percent to $30.84 per barrel in early Tuesday trading in New York.
Most analysts expect supply side pressures to drag on any recovery in the oil economy. Data last week showed inventories continued to build as demand wanes and last weekend's winter storm in the United States could result in higher storage levels as many major metropolitan areas were shut in by snow.
Blitzer said that while the consumer side of the U.S. economy was doing well, other sectors like oil are suffering.
"Moreover, the strong U.S. dollar is slowing exports," he said. "Housing is not large enough to offset all of these weak spots."
Psychology pressure could develop later in the trading day when The Bulletin of Atomic Scientists announce any adjustments to the minute hand of the so-called Doomsday Clock. A hypothetical measurement of the likelihood of a global catastrophe, the clock was moved ahead two minutes to three minutes to midnight in 2015.