NEW YORK, March 1 (UPI) -- Crude oil prices started Tuesday on pace for another round of solid gains as Chinese markets rally in response to Beijing's latest stimulus efforts.
China's benchmark composite index opened 2016 sharply lower, twice triggering a so-called circuit breaker mechanism designed to ensure market stability. The International Monetary Fund warned at the onset of the year that weakness in the Chinese economy could spill over to impact other parts of the global marketplace.
U.S. Treasury Secretary Jacob Lew met earlier in the week with Chinese banking officials in Beijing to discuss broad-based economic policy concerns. The People's Bank of China, meanwhile, said Monday it was cutting its interest rates for banks by a half percent to influence lending.
The bank's governor, Zhou Xiaochuan, said it was a "prudent" move to ensure quality growth for the Chinese economy. Saudi Arabia, meanwhile, issued a statement Monday saying it would work with fellow producers to ensure energy market stability, giving crude oil prices cause for rally.
The trajectory continued into Tuesday trading after the Shanghai closed up 1.68 percent. Brent crude oil was up 0.9 percent before the start of trading in New York to $36.91 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, rallied 1.6 percent to $34.30 per barrel before the opening bell.
Crude oil prices have moved steadily lower for much of the year as a string of data show markets remain oversupplied. Data from the U.S. government, however, show the low price of crude oil may be catching up with domestic producers.
The U.S. Energy Information Administration reported total U.S. crude oil production for December, the last full month for which data are available, was 9.2 million barrels per day, about 0.5 percent less than the previous month.