Oct. 10 (UPI) -- Crude oil prices recovered from their October slump to jump higher in early Tuesday trading after OPEC's secretary general said markets were balancing.
"The oil supply and demand variables are fast returning to balance after a record three years of unprecedented downturn, as evidenced by the continuously positive fundamentals, due largely to the full and timely implementation of supply adjustments by OPEC and non-OPEC countries," OPEC Secretary General Mohammad Sanusi Barkindo said from New Delhi.
The Organization of Petroleum Exporting Countries and a handful of non-member state producers started cutting crude oil production in January in an effort to draw the five-year average for global crude oil inventories back to even after years of chronic oversupply.
Barkindo said global levels were 338 million barrels above the five-year average at the start of the year and that was cut by almost half by the end of August. Demand, meanwhile, should accelerate.
The price for Brent crude oil was up 1.17 percent to $56.44 per barrel as of 9:17 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.5 percent to $50.34 per barrel, regaining a hold above the psychological level of $50 per barrel after losing grip on that level last week.
The rally was supported by an upward revision in global economic growth from the International Monetary Fund. The IMF said the trend line for growth in general was strengthening, in part because of gains in Asia and a recovering Europe.
Elsewhere, however, the prospects were cautionary at best, with the IMF warning the trajectory might not be sustainable. Nominal wage growth in most advanced economies is worse now than what it was at the height of the 2008-09 recession and the IMF said it downgraded its forecast for the United Kingdom, which is charting its course out of the European Union, and for the United States, which is struggling for legislative victories under U.S. President Donald Trump.
"While the baseline outlook is strengthening, growth remains weak in many countries, and inflation is below target in most advanced economies," the IMF's report read.
For OPEC, the secretary general said that, while the market was balancing, it was a global market that required an all-hands-on-deck approach for sustained leveling.
"We urge our friends in the shale basins of North America to take this shared responsibility with all the seriousness it deserves, as one of the key lessons learnt from the current, unique supply-driven cycle," he said.