NEW YORK, Sept. 29 (UPI) -- Expectations that U.S. crude oil production will continue to decline gave a lift to oil prices in early Tuesday trading despite lingering market pessimism.
The Wall Street Journal cites a research note from German investment firm Deutsche Bank saying U.S. crude oil production will move from growth to contraction in 2016 for the first time in close to a decade.
The bank's forecasts mirrors estimates made by the U.S. Energy Information Administration in a short-term market report for September. For the week ending Sept. 18, total U.S. crude oil production was 9.14 million barrels per day, two tenths of a percent higher than the previous week.
EIA said total crude oil production will decline 4.3 percent from expected full-year 2015 levels to 8.8 million barrels per day by 2016.
Crude oil prices have fallen dramatically from mid-2014 peaks above $100 per barrel as steady output from the Organization of Petroleum Exporting Countries and rising U.S. production contrasted with weak growth in the global economy.
Expectations of a drop in U.S. crude oil production through 2016 put downward pressure on crude oil prices. West Texas Intermediate, the U.S. benchmark for crude oil prices, gained a percentage point above the previous close to start trading in New York at $44.87. Brent crude oil mirrored WTI's gains to trade at $47.89 per barrel.
Supply-side pressure should persist, however, as OPEC shows no signs of cutting production amid the expected return of Iran to the global marketplace. Goldman Sachs this month said crude oil prices could, in a worst-case scenario, lose another 50 percent in value.