Aug. 22 (UPI) — Crude oil prices were moving between slight gains and losses early Tuesday given some competing trends at play in the migration toward market balance.
Global crude oil inventory levels have been on a steady decline, but remain above the five-year average. The Organization of Petroleum Exporting Countries aims to cut into the surplus with managed production declines, but output from some member states remains robust. Libya and Nigeria are two members exempt from the agreement because of national security concerns and any changes in their output can have day-to-day impacts on the price of oil.
Crude oil prices spiked Friday after a report of declining exploration and production activity in the United States. Australian energy company BHP Billiton, meanwhile, said Tuesday it was looking to sell off its shale portfolio in an effort to create more value.
A market report from Saxo Bank in Denmark said that, before the open of trading in the United States, crude oil looked “directionless” ahead of data releases from the American Petroleum Institute and the U.S. Energy Information Administration. Looking ahead, however, the price for oil could face pressure as demand slumps in the waning months of the year.
After slight gains in overnight trading, the price of crude oil was losing traction early Tuesday. The price for Brent, the global benchmark for the price of oil, was down 0.39 percent at 9:15 a.m. EDT to $51.46 per barrel. West Texas Intermediate, the U.S. benchmark, down 0.27 percent to $47.40 per barrel.
A survey of analysts’ sentiment from S&P Global Platts revealed expectations of a 3.7 million barrel draw on crude oil inventories and a 1.3 million drain on gasoline supplies. Those figures would normally be bullish, though Platts Oil Futures Editor Geoffrey Craig said in an emailed report that production is something to consider. At about 9.5 million barrels per day, U.S. oil production is the highest it’s been since July 2015.
API releases its data after U.S. trading ends Tuesday afternoon. EIA releases its data midway through the trading morning on Wednesday.
On the OPEC front, representatives met Monday to consider the impact of the balancing effort and suggestions emerged Tuesday that the fate of the multilateral efforts is coming into question. Parties to the agreement opted to extend it into March during meetings earlier this year.
Elsewhere, faith in the United States could be tested as U.S. President Donald Trump attends a rally Tuesday evening in Arizona. The visit comes after questions were raised over his response to a deadly incident at rallies in Charlottesville, N.C. If the president aims to use the forum to announce a pardon for former Arizona Sheriff Joe Arpaio, found guilty of contempt for not obeying a court order to stop targeting immigrants, “it will be clear that his true intent is to enflame emotions and further divide our nation,” Phoenix Mayor Greg Stanton said in a statement.
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