Crude oil prices move hesitantly into positive territory after research note finds support for optimism over the next few years. File photo by Monika Graff/UPI |
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NEW YORK, July 11 (UPI) -- A positive forecast for market trajectory helped lift crude oil prices in early trading Monday after a weak start, though underlying conditions remain negative.
The price for crude oil trended lower in overnight trading as investors continued to examine the latest data set on upstream oil and natural gas activity from services company Baker Hughes. For the fifth time in six weeks, weekly data show an increase in U.S. rig activity, signaling drillers are more confident despite the market volatility in the wake of the British referendum to leave the European Union.
More rigs could lead to higher production and push markets more heavily toward the supply side.
A research note from Citigroup, cited Monday by Bloomberg News, found analysts were expecting oil to recover by next year as the immediate shock from the so-called Brexit subsides.
"The pendulum is clearly swinging from the bears to the bulls," the Citigroup report read.
After moving lower during Asian trading, crude oil prices recovered by the time the market opened in New York. The price for Brent crude oil gained 0.4 percent to start the day at $46.91 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, recovered 0.3 percent to open at $45.53 per barrel.
Brent crude oil is down about 3.6 percent, or about $1.75 per barrel, since the June referendum to leave the EU passed. A statement Friday from the International Monetary Fund said downside risks are increasing for the economies that use the euro currency.
"Medium-term prospects are mediocre, with crisis legacies of high unemployment, elevated public and private debt, and deep-rooted structural weaknesses weighing on the outlook and productivity growth," the IMF said.
For oil prices, positive pressures eased since May, when wildfires curbed output from Canada, the top oil exporter to the United States. Lingering supply issues remain, however, because of militant activity in Nigeria, a member of the Organization of Petroleum Exporting Countries.
A daily briefing Monday from the U.S. Energy Information Administration, meanwhile, finds U.S. production increases under a reference case that envisions oil back above $100 per barrel by 2030. While expanding far less dramatically than since the onset of the shale era at the end of the last decade, EIA said production of petroleum and other liquid fuels increases from 14.8 million barrels per day to 18.6 million bpd by 2040.
