Oil rallies on back of upbeat sentiments from energy companies

NEW YORK, Oct. 19 (UPI) -- Upbeat sentiment expressed by some of the largest energy companies in the world helped push crude oil prices into rally mode in early Wednesday trading.

"We have seen early signs of markets rebalancing," Andrew Mackenzie, the CEO of Australian energy and mining giant BHP Billiton, said in a statement Wednesday.

Most industry forecasts show the market still favors the supply side, a situation that helped drag crude oil prices below $30 per barrel earlier this year. The Organization of Petroleum Exporting Countries is working with non-member states to freeze, or possibly even cut, production levels in an effort to pull the market out of a long slump.

Lower crude oil prices forced energy companies to cut back heavily on spending, causing broad-based pain for those tied to the exploration and production side of the industry. Halliburton, one of the biggest oilfield services companies in the word, managed to eke out a small profit during the third quarter as oil prices start to hold steady above $50 per barrel.

The price for Brent crude oil gained 1.1 percent at the start of the trading day in New York to reach $52.24 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, rallied 1.4 percent to open at $50.99 per barrel.

Any rally may be supported by data on crude oil inventory levels in the United States. A build would indicate supply-side pressures, though weekly figures may be skewed by the outage of infrastructure from Plains All American Pipeline that sends oil from Colorado to the U.S. storage hub in Cushing, Okla.

Wednesday's rally may be in part a reflection of sentiment from China that its economy is stabilizing. Sheng Laiyuan with the National Bureau of Statistics was quoted by the official Xinhua News Agency as saying the Chinese economy remained at a 6.7 percent growth rate during the third quarter.

"The general performance was better than expected, and the national economy grew steadily with progress being made and quality improved," the spokesperson said.

The year opened with concerns about the Chinese economy that spread after trigger mechanisms on the nation's stock exchange halted trading.