Crude oil prices show a rally effort in early Thursday trading after the Bank of England raises its forecast for economic growth. File photo by Monika Graff/UPI |
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NEW YORK, Nov. 3 (UPI) -- Crude oil prices snapped their losing streak Thursday on upbeat growth forecasts for the British economy and sentiment regarding a new market floor.
Oil prices moved sharply lower during the previous session after the U.S. Energy Information Administration reported a build in U.S. crude oil inventories that far exceeded some expectations. An October rally in oil was supported in part by a steady string of data showing inventory levels were declining, adding leverage to indications the market was returning to balance.
Olivier Jakob, the managing director at Swiss oil-market research group Petromatrix, said in an emailed report that his models show oil prices may have bottomed out for the near term.
"The flat price momentum is still negative but after the very sharp correction we could start to stabilize near $45.50 per barrel in Brent as the 200-day moving average has been rising and is now at $45.14 per barrel," he said in his report.
Markets staged a moderate rally in early Thursday trading after losses of more than 3 percent at points during the previous session. The price for Brent crude oil was up 0.4 percent to start the day at $47.06 per barrel. West Texas Intermediate, the U.S. benchmark for oil, was up 0.1 percent to open at $45.40 per barrel.
Midway through Wednesday's session, the U.S. Federal Reserve said it was standing pat on interest rates, but held the door open for action in December. Fed rate action would influence the value of the dollar, and subsequently the commodities that are trading in the U.S. currency.
From London, the Bank of England raised its forecast for economic growth from 0.8 percent to 1.4 percent for next year. Since the British referendum to leave the European Union in June, the bank said overall economic sentiments have improved.
"The near-term outlook for activity is stronger than expected three months ago," it said.
The referendum to leave the EU sent shockwaves through the global economy, putting downward pressure oil prices that had already touched historic lows in 2016 because of the glut of oil on the market. In late October, the British Office for National Statistics reported third quarter growth in gross domestic product was 0.5 percent, a 2.3 percent gain from third quarter 2015.
Brexit pressure remains nevertheless as the Bank of England said it cut its 2018 forecast by 0.3 percentage points to 1.5 percent.
