Balance sentiments pull oil prices lower

NEW YORK, Sept. 13 (UPI) -- A sluggish forecast for global oil demand and a corresponding positive turn for production helped push oil prices lower in early trading Tuesday.

Crude oil prices opened the trading day in New York lower on Monday after a report from the Organization of Petroleum Exporting Countries said production from non-member states was falling less dramatically than it initially expected.

Lower crude oil prices had curbed production in some shale basins in North America, and output there was handicapped further by May wildfires in Canada. Some companies in the United States, however, said they planned to increase production as efficiency improves, while Canada is recovering ground from the millions of barrels lost to fires this year.

The International Energy Agency said in its monthly report for September that it revised its demand forecast for 2016 and 2017 lower, but not by as much as OPEC had expected. According to the IEA, non-OPEC producers led the way in a decline in output, though a return to growth is expected in 2017.

For nearly two years, crude oil markets have been pressured by global economic growth that was too slow to take up the heavy supply of energy products. A market report from the IEA published in May suggested the gap between supply and demand had narrowed to the point that market balancing was underway and the latest report suggests that sentiment is fading.

The price for Brent crude opened the day in New York at 1.5 percent below the previous close to $47.58 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 1.9 percent to start the day at $45.41 per barrel.

Olivier Jakob, the managing director at Swiss oil-market research group Petromatrix, said in an emailed statement the IEA's forecast was telling from the demand perspective, while OPEC's report took a supply-side focus. In early September, he said the predicted balance has yet to emerge and both reports have now pushed that scenario out to at least 2018.

"The IEA data is also suggesting that an OPEC 'freeze' will not be enough to rebalance the market in 2017," he said.

Ministers meeting later this month in Algeria are said to be considering extraordinary action to stimulate the market. Previous efforts this year collapsed along multilateral fissures as producers jockeyed to protect their market share.