Oct. 11 (UPI) -- Crude oil prices were slow out of the gate Wednesday, posting only minor gains after OPEC economists pointed to tighter market conditions ahead.
OPEC said global oil demand is on pace to increase about 1.5 million barrels per day in 2017, an upward revision of around 30,000 barrels per day from the last report. Economists at the Organization of Petroleum Exporting Countries said that growth is pinned largely to overall improvements in the global economy.
Growth expectations from OPEC support findings from the International Monetary Fund, which said Tuesday the trend line for growth in general was strengthening, in part because of gains in Asia and a recovering Europe.
OPEC said the balance between supply and demand, meanwhile, was narrowing. OPEC members and a handful of non-member state producers are working to drain the surplus on the five-year average for global crude oil inventories with coordinated production declines and OPEC Mohammad Sanusi Barkindo said this week the effort was clearly working.
Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI the balancing effort was indeed working, but perhaps not as quickly as OPEC members would like. OPEC produced 32.7 million barrels per day in September and sees demand at 33.1 million next year.
"The balancing is undoubtedly both due to capped production and strong seasonal demand," he said.
The market reaction was tepid at best because OPEC figures leave little room for maneuvering. Gains or losses could come from Libya and Nigeria, two members excluded from the production agreement because they need oil revenue to tackle national security concerns.
The price for Brent crude oil was up 0.16 percent to $56.70 per barrel just minutes before trading began in New York. West Texas Intermediate, the U.S. benchmark for the price of oil, was also up 0.18 percent to $51.01 per barrel.
OPEC economists said WTI should fall somewhere between $50 and $55 per barrel next year. Any higher would stimulate upstream activity, while a lower point would curb capital expenditures. OPEC noted, however, that efficiency and costs are moving higher for U.S. shale and could create future headwinds.
The market may be dealing still with a hangover from an IMF report that, while bullish on some fronts, was cautionary at best, particularly when noting wage growth is lower now than during the global recession.
Stephen Brennok, an analyst with London oil broker PVM, said the IMF stayed true to its "doomsayer roots."
"It warned that medium-term risks remain skewed to the downside and that the global recovery is on thin ice," he said in an emailed market report.