June 1 (UPI) — Crude oil prices were flat to slightly lower in early Thursday trading as consumer demand issues balance against a large draw in oil inventories.
Political issues ranging from a tightening race in the British general election to a pending decision from the U.S. president to pull out of the Paris climate deal added to the market jitters built up around swelling crude oil supplies from OPEC member Libya, which is exempt from a multilateral effort to balance the market with production declines, and helped weigh on crude oil prices in the Wednesday session.
Market players are keeping close watch on supply and demand metrics at least since the Organization of Petroleum Exporting Countries started leading the effort in January to balance the market. Late Tuesday, the American Petroleum Institute said crude oil inventories in the United States, the world’s leading economy, declined by more than 8.6 million barrels, far more than the 3.2 million barrel draw forecast by S&P Global Platts earlier this week.
Before the start of trading in New York, the U.S. Energy Information Administration reported gasoline demand in March was down year-over-year for the third month in a row, suggesting some consumer factors may not be eating away at the supply-side strains. First-time claims for unemployment for the week ending May 27, meanwhile, were up 13,000 for a seasonally adjusted 248,000, the Labor Department reported.
Crude oil prices were mixed in part because of trading contracts. The price for Brent crude oil, now in the August contract, was down 0.1 percent minutes before the opening bell to $50.71 barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, still in the July contract, was up 0.20 percent to $48.41 per barrel.
Markets will be moved midway through the trading day once the EIA publishes official figures on U.S. crude oil inventories and other metrics.
Meanwhile, the strengthening relationship between Russia and Saudi Arabia, two of the main players in the OPEC balancing effort, could signal a new axis in market influence.
Russia in the past had scoffed at efforts to cut back on production, but is now one of the main contributors to the effort outside of OPEC. Saudi Energy Minister Khalid al-Falih was quoted by the official Saudi Press Agency as saying the relationship between his country and Russia was stronger than ever.
Both sides, he said, were committed to doing “everything necessary” to achieve the shared goal of offsetting the supply-side strains.
Dont forget to “Like” us on Facebook
Need something to share, visit our sister site for the
‘News in the last 30 days”
in a clear concise package ….