Aug. 17 (UPI) — Crude oil prices were moving slightly lower early Thursday as sentiment about a balanced market competed against rising U.S. and OPEC oil production.
Crude oil prices are on a steady decline, erasing a rally that lasted for most of the latter part of the first half of 2017. The price for Brent, the global benchmark for the price of oil, is down about 4.5 percent from where it started August.
Balance has been the word of the year, with the Organization of Petroleum Exporting Countries working to eat away at a surplus in the five-year average for global crude oil inventories with managed production declines.
Data this week from the U.S. Energy Information Administration supported a bullish report on declines in U.S. crude oil inventories offered by the American Petroleum Institute. Commercial crude oil inventories are about 26 million barrels below this time last year, but are 214 million barrels greater than the same week in 2014.
Meanwhile, U.S. crude oil production predictions continue to show gains despite weak market conditions. OPEC, for its part, is fighting something of an uphill battle because Libya, which is exempt from the deal because of national security concerns, continues to pump more oil.
“Despite positive indications that the oil complex is working toward balance, market concerns remain regarding U.S. and OPEC supply and the fact that the high demand season soon will be coming to a close,” Jenna Delaney, a senior oil analyst at PIRA Energy, said in an emailed report. “From a fundamental standpoint, prices are likely to remain range bound in the near term.”
Brent was trading 0.5 percent lower than the previous close to sell for $50.02 per barrel at 9:20 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, continued its drift away from Brent parity by losing 0.56 percent to fall to $46.52 per barrel.
Lower WTI prices make it competitive in some global markets. For the week ending Aug. 11, U.S. crude oil exports were about 20 percent higher than the four-week average for this time last year, but represented only a fraction of the average 9.5 million barrels per day produced for the same week.
The U.S. government said this week it planned to sell barrels from its strategic reserves, though the volume is not likely to have a major market impact.
On the economic front, the U.S. Labor Department reported first-time claims for unemployment declined last week by 12,000, though the four-week average showed a decline of just 400 from the previous week.
Overseas, data from the European Union show inflation for the countries that use the euro currency at 1.3 percent in July, stable since June but above the 0.2 percent gain from July 2016. Gross domestic product for the same 19 countries grew 2.2 percent during the second quarter.