Oil rally loses steam

NEW YORK, Nov. 4 (UPI) -- Crude oil prices lost some momentum in early Wednesday trading, after a rally sparked in part by labor strikes in the Brazilian oil sector.

Crude oil prices surged in Tuesday trading as labor strikes gripped much of the Brazilian oil sector. Brazil is the second-largest oil producer in South America, behind Venezuela, which is a member of the Organization of Petroleum Exporting Countries.

According to the U.S. Energy Information Administration, Brazil's estimated 2.95 million barrels of oil produced on average last year made it the No. 9 oil producer in the world and the regional No. 3, behind the United States and Canada, respectively.

Brazil's state-controlled oil company Petrobras said its production was down about 13 percent, or around 273,000 bpd, because of the strike.

The price for Brent crude oil rallied above the $50 per barrel mark in Tuesday trading, but pulled back modestly in early trading Wednesday. Brent lost about 0.5 percent in early trading in New York to $50.29 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, lost about 0.4 percent to $47.71 per barrel.

Metrics still show the market is favoring the supply side as, despite weak profits because of lower oil prices, most companies are reporting increased production figures for the third quarter. Weak demand and oversupply are keeping downward pressure on crude oil prices.

The American Petroleum Institute reported a 2.9 million barrel increase in U.S. crude oil stockpiles for the week ending Oct. 30, the sixth straight week of gains. Official data from the EIA is expected late Wednesday.