April 30 (UPI) — Easing in geopolitical risk, increased U.S. exploration activity and weaker gasoline demand in China all contributed to a drop in crude oil prices early Monday.
A thaw on the Korean peninsula continues to ease investor nerves rattled by bellicose rhetoric between U.S. President Donald Trump and North Korean leader Kim Jong Un. With Kim crossing the demilitarized zone to meet his South Korean counterpart last week, the tone in Washington is changing.
In weekend comments to reporters, U.S. Secretary of State Mike Pompeo, the former director of the CIA, said the North Korean leader is looking for mutual assurances and setting up “concrete [and] irreversible actions.”
That reduced some of the risk that built up behind oil in the first quarter of the year. On Friday, Baker Hughes reported another set of gains in U.S. exploration and production activity, signaling American production could accelerate through the rest of the year, easing some of the concern about a tightening market.
The price for Brent crude oil was down 0.85 percent as of 9:15 a.m. EDT to $73.16 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.13 percent to $67.33 per barrel.
Crude oil prices were mixed last week after data showed a 2.2 million barrel increase in crude oil inventories, and an 800,000-barrel gain in gasoline inventories, but a 2.6 million drop in inventories of distillate fuels like diesel. During the weekend, China, the second-largest economy in the world behind the United States, reported domestic crude oil and distillate inventories declined, but gasoline stockpiles went up after demand flattened following a spring holiday season.
In the United States, the Commerce Department reported personal income levels increased $47.8 billion, or 0.3 percent, last month, but personal spending increased $61.7 billion, or 0.4 percent.
“Within goods, purchases of recreational goods and vehicles were the leading contributor to the increase,” the department stated. “Within services, the largest contributor to the increase was spending for household electricity and gas.”
Total consumer spending, which measures underlying inflation, hit 2 percent last month, in line with a target set by the U.S. Federal Reserve. The U.S. economy grew by 2.3 percent in the first quarter, better than expected, but below the 2.9 percent growth recorded in the fourth quarter.