NEW YORK, Jan. 25 (UPI) -- Crude oil prices retreated after surging more than 9 percent during the previous session as markets reacted to the latest supply-side concerns from OPEC.
Oil prices staged a rally last week, pulling above $30 per barrel after sinking to around $27 per barrel earlier in the week. January's drop in crude oil prices was triggered in large part by growing concerns about the pace of global economic recovery, with Chinese pessimism casting the largest shadow over growth.
Last week's rally was sparked in part by reactions to the European Central Bank, which vowed to pull the necessary levers to stimulate regional growth. Supply-side pressures remain, however, and continued to drag on oil prices in the early rounds of Monday trading.
"It is crucial that all major producers sit down to come up with a solution to this," Abdalla El-Badri, the secretary-general of the Organization of Petroleum Exporting Countries, said in a speech from Chatham House in London. "The market needs to see inventories come down to levels that allow prices to recover and investments to return."
OPEC and many other industry players view the market as oversupplied. Last week, the U.S. Energy Information Administration said U.S. crude oil stockpiles increased by 4 million barrels for the week ending Jan. 15. Inventories may build further in response to a major winter storm system that battered the U.S. East Coast during the weekend.
Brent crude oil opened the week lower, falling 3.6 percent in New York to start the day at $31.03 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, lost 3.8 percent from the previous close to open at $30.94.
Oil prices are off about 15 percent from the start of the year, even after last week's rally.
Exxon Mobil, in a report on near-term trends in the global economy and energy markets, said Monday there are limited signs of improvement.
"In 2009, the world economy experienced the worst global recession in the post-World War II years," the report read. "Since then, apart from an initial rebound in 2010, recovery has been slow and uneven across various regions of the world."