April 18 (UPI) -- A surprise draw on U.S. crude oil inventories and the usual OPEC chatter sparked a major rally for crude oil prices in early Wednesday trading.
After the price for Brent crude oil shot up nearly 2 percent in the first few trading days of 2018, Iranian Oil Minister Bijan Zangeneh recognized the support was in part because of the commitment by members of the Organization of Petroleum Exporting Countries to extend a production cut arrangement into a second year.
At the time, however, he said OPEC members "are not keen" on anything above $60 because it could stimulate U.S. shale oil production. Any comments on price attributed to OPEC members usually sends the market moving in one way or another and on Wednesday, several media outlets reported that Saudi Arabia, the de facto leader of OPEC, may want even higher oil prices.
That's enough to drive oil prices up sharply early in the trading morning. The price for Brent crude oil was up 1.7 percent as of 9:16 a.m. EDT to $72.78 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 2 percent to $67.83 per barrel.
OPEC's effort is aimed at draining the market surplus that pushed oil prices below $30 per barrel two years ago. The balancing act, however, has been offset somewhat by gains in U.S. output, though even the U.S. market is tightening.
Late Tuesday, the American Petroleum Institute, an industry trade group, reported U.S. crude oil inventories declined by about 1 million barrels last week. That's in contrast to an estimated build of 625,000 barrels from S&P Global Platts. Federal U.S. data last week showed a build of 3 million barrels.
Higher oil prices could put strains on an economy that's so far showed strength. The International Monetary Fund on Tuesday sounded optimistic, but warned that trade tensions between the United States and China could throttle growth.
On Wednesday, IMF financial counselor Tobias Adrian said things look good to a point.
"Looking ahead, the odds of a downturn remain elevated, and there's even a small chance of a global economic contraction over the medium-term," he said in a statement.