Positive forces build for crude oil prices

NEW YORK, April 6 (UPI) -- Factors ranging from a drop in U.S. crude oil inventories to an increase in China's service sector helped give crude oil prices reason to rally Wednesday.

China, whose economic slowdown triggered global concerns in 2015 and early 2016, reported a Purchasing Mangers' Index at 52.2 in March, up from the 51.2 reported the previous month. Figures above 50 are generally indicative of economic expansion.

Economists this week warned China's growth patterns may continue to have a broader impact on the pace of global recovery. Christine Lagarde, the managing director of the International Monetary Fund, warned earlier this week slow-growth trajectories suggested the global economic climate may best be described as the "new mediocre."

Crude oil prices have been in a general decline since a rally above $40 per barrel in March was triggered by expectations Russia, Saudi Arabia and other major producers would agree at a meeting later this month in Doha to keep production steady at January levels. Saudi Arabia last week expressed reservations about agreements to the freeze without widespread support. Kuwaiti officials have said they're eager to get on board.

The price for Brent crude oil moved up by 1.8 percent to trade at $38.56 per barrel in early trading Wednesday in New York. West Texas Intermediate, the U.S. benchmark price for oil, was up 2.8 percent to $36.91 per barrel.

Positive support for oil developed late Tuesday when data from the American Petroleum Institute showed U.S. crude oil inventories declined 4.3 million barrels last week, a sign demand may be catching up with supplies.

Nawal al-Fuzaia, the Kuwaiti governor to the Organization of Petroleum Exporting Countries, said Tuesday members and non-member states may agree to hold output steady when they meet April 17 in Doha. Long-term, however, she said she expected Brent crude oil would stay between $45 per barrel and $60 per barrel through 2019.

Iran, meanwhile, said it was keen on putting more of its crude oil oil the market as sanctions pressures ease, adding to the supply-side pressures building on the market. Iranian Oil Minister Bijan Zangeneh said late Tuesday output could increase 25 percent to 4 million barrels per day.