NEW YORK, May 12 (UPI) -- Data showing strong gains in global demand and a year-on-year slowdown in growth in oil production led to a rally in crude oil prices in early Thursday trading.
A sluggish start to the trading day Wednesday evolved into a major rally in crude oil prices after data from the U.S. Energy Information Administration showed a decline in domestic oil inventories for the first time in six weeks.
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. The latest monthly market report from the International Energy Agency finds balance is finally starting to return to the market.
In terms of production, the IEA finds global crude supplies increased from March to April, though the 50,000 barrel per day gain was far less than the 3.5 million bpd reported a year earlier. In terms of demand, the Paris-based energy agency revised its growth forecast for the first quarter higher to 1.4 million bpd because of strong gains in China, India and Russia.
The price for Brent crude oil gained 0.8 percent in response to open the day in New York at $47.98 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, moved up 0.7 percent to start trading at $46.56 per barrel.
Crude oil prices are up more than 30 percent since the start of April as market factors indicate balance. The rally could slow during the latter half of the year, however, as the IEA said in its report it was leaving its full-year growth forecast unchanged at 1.2 million bpd.
In a short-term market report published earlier this week, EIA said it expected the 2016 average for Brent crude oil will be around $41 per barrel.
Crude oil prices last week inched lower as U.S. data showed declines in the labor sector. The U.S. Labor Department said Thursday the number of new claims for unemployment moved up 20,000 to 294,000 for the week ending May 7. The less-volatile four-week moving average was revised higher by 10,250 to 268,250.
"There were 242,882 initial claims in the comparable week in 2015," the Labor Department said.