NEW YORK, Oct. 18 (UPI) -- Oil prices moved higher in early Tuesday trading as OPEC interjected itself back into the market conversation by reiterating prospects for a production freeze.
An expected increase in crude oil production from Libya and Nigeria, two members of the Organization of Petroleum Exporting Countries, coupled with signs the U.S. economy was making slow but steady gains helped erode a rally in crude oil prices as investors fretted over the value of a U.S. currency used to buy barrels on the global market.
Crude oil prices returned to rally in early Tuesday trading, however, as some of the biggest names in energy said during an oil conference in London that support was building for a production freeze among OPEC members and non-member states alike.
Russia has been a leading non-member supporter of efforts to control production and influence crude oil prices. Azerbaijan, one of the largest producers in Central Asia, has now stepped in line behind the proposal.
Verbal influence from the proposal, which could be solidified in November, helped give investors confidence that oil wouldn't drop back below $30 per barrel like it did earlier this year. Oil bounced up in early Tuesday trading given the support for the agreement expressed Tuesday in London.
The price for Brent crude oil was up 0.9 percent to start the day in New York at $52 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, gained 1 percent over the previous close to open at $50.46 per barrel.
Tuesday's rally was supported in part by an estimate from Goldman Sachs that crude oil demand slowed down in the third quarter. Demand growth during the first quarter was robust and Goldman said in a note published Tuesday that growth could recover late this year, but remain "flattish" for 2017.
Goldman said the market could return to a good level of balance between supply and demand by next year, almost a year later than some analysts expected earlier this year. There is still a risk, however, that energy product inventories will remain high next year, suggesting the market would stay tilted toward the supply side.
Speaking from the same London conference, BP CEO Bob Dudley said the era of lower crude oil prices was at least partially a result of the industry's success in production. It's not demand that's keeping the market suppressed, he said, but the glut of oil on the market.
"Demand may be strong, but supply is even stronger, with half a century's worth of oil and gas in country reserves alone," he said. "That is what has led to sustained lower prices and a new and necessary emphasis on competitiveness."