Oil prices up on expectations of market balance

NEW YORK, April 26 (UPI) -- Anticipation about the pace of the global economy and expectations Tuesday of a return to balance added more fuel to the fire growing in support of oil prices.

Oil prices at one point dropped below $30 per barrel this year on signs the global economy was moving too slow to take on the extra supplies. A graphic produced Friday by Credit Suisse indicated that, from its perspective, "the oil market is rebalancing."

British energy company BP said Tuesday it expected supply-side strains to ease as 2016 evolves, noting its own production was expected to wane. BP CEO Bob Dudley said he was anticipating the market would return to balance at some point in the near future.

"Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year," he said in a statement.

Oil prices continued their long streak of improvement by posting another rally during early trading Tuesday. The price for Brent crude oil moved up 1.6 percent to $45.22 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, gained 1.6 percent by the open to start the day at $43.33 per barrel.

BP said its economic metrics would move toward the positive side once oil recovered to around $50 per barrel.

Energy was supported Tuesday as investors held their breath in anticipation of pending policy decisions from the Bank of Japan and the U.S. Federal Reserve.

Bank of Japan Gov. Haruhiko Kuroda said last week he expected the Japanese economy was on the road to moderate recovery, though a slowdown in China and pressure from low crude oil prices could drag on momentum.

"Meanwhile, there was an increasing risk that an improvement in the business confidence of Japanese firms and conversion of the deflationary mindset might be delayed and that the underlying trend in inflation might be negatively affected," he said.

U.S. Federal Reserve Chair Janet Yellen said crude oil prices earlier this year had been less-than-favorable for broad-based growth. The U.S. Commerce Department reported real gross domestic production increased at an annual rate of 1.4 percent during the fourth quarter, compared with 2.0 percent GDP growth during third quarter 2015.