Crude oil prices waxed and waned in pre-market action before a soft recovery Tuesday, following a major surge sparked by OPEC sentiments on supply and demand. File photo by Monika Graff/UPI |
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NEW YORK, Aug. 9 (UPI) -- Oil prices were relatively flat in the early rounds of trading Tuesday as market watchers pulled back the curtain on momentum for supply and demand.
Crude oil prices rallied Monday, following a brief dip below $40 per barrel last week, after Qatari Energy Minister and President of the Organization of Petroleum Exporting Countries Mohammed bin Saleh al-Sada said the 14-member group would hold an extraordinary meeting in late September to consider the status of the market.
According to him, demand for energy products was expected to surge in the latter half of the year, while supplies would come under pressure because of weak sector activity.
A note produced by Morgan Stanley said gains since the drop below $40 may have resulted in a false sense of optimism in the energy market.
"Greater headwinds lay ahead, especially for crude oil," the emailed report read.
Oil prices moved slightly higher at the start of trading in New York. The price for Brent crude oil was up 0.2 percent to open at $45.48 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.6 percent to $43.27 per barrel early Tuesday.
OPEC's president said the market was moving toward balance. A survey from its 14 members by S&P Global Platts found net production of 33.1 million barrels per day was a 1.2 percent increase from June and the highest level at least since February, a month that saw crude oil prices drop below $30 per barrel.
Generally speaking, a report from the International Energy Agency found net energy production is increasing more than energy use.
Morgan Stanley data show the price for Brent crude oil likely peaked during the second quarter and should taper off to average $40 per barrel by the fourth quarter. Brent at $50 is expected by second quarter 2017.
