Oil drifts further away from $40 per barrel

NEW YORK, March 15 (UPI) -- Demand uncertainties and continued speculation over production levels pushed crude oil prices into negative territory for the second straight day Tuesday.

Crude oil prices shot up last week after U.S. forecasts showed an expected decline in production. Already, energy companies are spending less on exploration and production as a result of negative pressure from crude oil prices.

Russian Oil Minister Alexander Novak said Monday from Tehran there were agreements in principle by major producers to freeze output, though official terms are far from certain.

"An option is currently considered that a document or a common declaration of countries may be signed," he said.

Crude oil prices have moved sharply lower from 2014 levels because supplies far outweigh demand in a soft global economy. In European markets, employment and industrial activity have shown signs of recovery, though the European Central Bank last week cut its inflation and growth expectations.

Crude oil prices moved lower for a second straight day following the production announcement from Tehran. Brent crude oil lost 1.6 percent to start the trading day in New York at $38.88 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was down 1.3 percent to open at $36.67 per barrel.

The Organization of Petroleum Exporting Countries said in its monthly market report for March it lowered its economic growth expectations for the year. Demand for oil from the 13-member group was revised lower for 2016.

OPEC said crude oil prices were supported by labor sector recovery and economic stimulus efforts worldwide. A build in crude oil inventories, particularly at the Cushing oil terminal in Oklahoma, means futures markets will continue to face "headwind resistance," the monthly market report said.