June 16 (UPI) -- Crude oil prices bounced back into positive territory early Friday, but bearish sentiments may be entrenched for the short term at least.
Crude oil prices have been through two consecutive weeks that saw markets lose as much as 4 percent because of lingering supply-side strains. Reports this week from the International Energy Agency and economists at the Organization of Petroleum Exporting Countries said balance was returning to the market, but it was taking longer than expected.
In defending a move to cut its key lending rates, the Central Bank of Russia said Friday there were economic risks ahead because the movement in crude oil prices was lower than expected since OPEC decided to extend a coordinated production decline agreement into next year. Many market watchers had expected OPEC to make deeper cuts as the $50 floor under crude oil during the first quarter started to look more like a ceiling.
Bargain hunters may be moving back into the markets Friday, though the rally moderated somewhat ahead of the opening bell. The price for Brent crude oil was up about 1 percent in the minutes before the start of U.S. trading to $47.43 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.92 percent to $44.87 per barrel.
Market watchers examining recent trends may see the price for oil bottoming out and set to bounce. Stephen Brennock, an analyst at London broker PVM, said in an emailed newsletter that pessimism, however, was firmly entrenched.
"While the demand outlook is on track for a much-needed boost over the coming months, pervasive doubts over the oil market rebalancing will linger without confirmation that the supply overhang is waning," he said. "Until such conclusive proof emerges, all bets are off."
Supply-side concerns have emerged in the form of weaker demand for consumer fuels.
Markets could be swayed later in the morning once Baker Hughes releases weekly data on rig counts, a loose metric to gauge industry confidence in spending on exploration and production. The price of oil is reaching a point that threatens the economics of many basins, including U.S. shale, and durable trajectory in either direction could be a determination of the next market move.