Feb. 12 (UPI) -- Crude oil prices recovered lost ground in early Monday trading on expectations of strong global demand and a rebound in global stock markets.
Crude oil prices wiped out all of their yearly gains in the span of a few trading sessions in February as inflationary fears pushed investors into safe-haven assets and out of the stock market. U.S. markets posted record-setting declines last week, but by Monday the situation had eased somewhat.
China's benchmark Shanghai Composite Index closed the day up 0.78 percent. Economists at the Organization of Petroleum Exporting Countries said the string of losses for crude oil prices was triggered by volatility in the global equity market and stronger-than-expected growth in U.S. crude oil production.
U.S. oil production, at just above 10 million barrels per day, is higher than that of Saudi Arabia, the de facto leader of OPEC.
Higher production would normally send crude oil prices lower, as U.S. production gains have offset OPEC's effort to balance the market with coordinated production cuts, an effort now in its second year.
In its monthly market report for February, OPEC said it revised its global growth forecast higher by 0.1 percent for a gain of 3.8 percent in global gross domestic product. The United States is expected to grow at 2.8 percent this year, while China expands by 6.5 percent. India tops the list of major economies, meanwhile, with a GDP growth rate of 7.2 percent expected this year.
Global oil demand was revised higher by 60,000 barrels per day from January.
Both major indices for crude oil were up by more than 1 percent in overnight trading, but have cooled somewhat ahead of the opening bell. The price for Brent crude oil, the global benchmark, was up 0.94 percent as of 9:15 a.m. EST to $63.38 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.11 percent to $59.86 per barrel.
Further ahead, OPEC said total U.S. crude oil production, while accelerating on the back of gains in crude oil prices since last year, could taper off or even stall out in the second half of 2018, diminishing some of the supply-side pressures so far this year.
Suhail al-Mazrouei, the Emirati energy minister and OPEC president, told Bloomberg News that shale oil wouldn't be a threat to market.
"Shale is coming and the expectation is that it will come stronger than in 2017 and this is something that we have to watch," he was quoted as saying. "But considering all factors, I don't think it will be a huge distorter of the market."
Secondary sources reporting to OPEC economists said total member state production for January was below a self-imposed ceiling and, at 32.3 million barrels per day, is experiencing a 10,000 barrel-per-day drop from December.