Oil prices stage rebound after dropping below $50

NEW YORK, Oct. 27 (UPI) -- Growth from a British economy charting a path out of the European Union balanced against potential gains in output to give oil prices a boost early Thursday.

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.

"This is the first release of GDP covering a full quarter of data following the EU referendum," the report read. "The pattern of growth continues to be broadly unaffected following the EU referendum with a strong performance in the services industries offsetting falls in other industrial groups."

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. Crude oil prices dropped sharply at the start of Wednesday trading on industry reports of a major draw on U.S. crude oil inventories, got a lift after an official government release showed a surprise draw, but settled back to below $50 per barrel by the close of trading in New York.

The sigh of relief that came in response to British GDP figures helped lift crude oil prices modestly by the start of trading Thursday in New York. The price for Brent crude oil, the global benchmark based on a blend of North Sea oils, was up 1.2 percent to open at $50.58 per barrel. West Texas Intermediate, the U.S. benchmark, gained 0.9 percent to start the day at $49.65 per barrel.

Discussions on what to do next about a September proposal by members of the Organization of Petroleum Exporting Countries to put a ceiling on production levels influenced crude oil prices in recent sessions. Bickering over market shares and output from parties to the proposal have surfaced in recent days and Nigeria, an OPEC member struggling with militancy, said it could play a stronger market role after outreach to Niger Delta bandits.

In the United States, where production levels helped push the market toward the supply side, data from Texas, the No. 1 oil producer in the nation, show output was slightly higher than the previous year. Most energy companies out with third quarter earnings so far have said that, with oil holding stable at around $50 per barrel, a recovery in the North American market was on the way.