June 19 (UPI) -- Crude oil prices edged slightly higher in early Monday trading after the Saudi oil minister injected a note of optimism into an otherwise lackluster market.
Crude oil prices moved under $50 per barrel in early June on signs that supply-side strains were easing slower than expected. Some of the pressure has come from weak demand for consumer fuels like gasoline in the United States, the world's largest economy and top oil consumer.
Oil prices were supported above $50 per barrel after members of the Organization of Petroleum Exporting Countries led a coalition toward managed production declines to bring the market back to balance. Speaking to London based newspaper Asharq al-Awsat, Saudi Oil Minister Khalid al-Falih said long-term trends were narrowing around a balanced market
"Most day to day fluxes in the market are automatic reactions to a number of short-term factors such as news headlines [and] forecasts of production from some sources that may not eventually materialize," he said. "In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the [OPEC-led] cut needs time to take effect."
Oil prices were moving moderately higher before the start of U.S. trading on Monday. The price for Brent crude oil was up 0.2 percent about a half hour before the start of trading in New York to $47.46 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was higher than Friday's close by 0.13 percent at $44.80 per barrel.
Crude oil prices moved higher late last week even as oilfield services company Baker Hughes reported weekly gains in exploration and production activity. Reported as rig counts, Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in a daily newsletter said the trend masks what could be an emerging slowdown in U.S. shale oil production.
"Oil prices continue to be weak as another rise in U.S. oil rig counts overshadows the fact that U.S. production in June is well below what the Energy Information Administration was predicting," he said.
OPEC's efforts have been balanced not only U.S. oil production, but also by Nigeria and Libya, two OPEC members excluded from the agreement so they can steer oil revenue toward national security efforts.
Both countries reported substantial gains in production between April and May. The Saudi oil minister brushed off the recovery, saying there were many contributors to the balancing effort.