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Oil steady as Riyadh holds to market line

Oil prices still off more than 10 percent for the year.

By Daniel J. Graeber

NEW YORK, Jan. 27 (UPI) -- Reports of solid growth expectations in the U.S. economy, coupled with status quo comments from Riyadh, left oil markets stymied in early Tuesday trading.

The price for Brent, the global benchmark, and West Texas Intermediate, the U.S. benchmark, were both relatively unchanged from the previous session at the start of the trading day Tuesday, fetching $48.22 and $45.21 per barrel, respectively.

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Oil prices have been in a steady decline since a late November decision from the Organization of Petroleum Exporting Countries to hold production levels static despite the bear market for crude oil. Oil prices are down about 14 percent since the start of 2015.

OPEC had adjusted its output to control the price of oil, churning out more when prices rose and closing the spigot during declines. Khalid al-Falih, chief executive officer at oil export leader Saudi Aramco, told Bloomberg News crude oil prices were now a market concern.

"Supply and demand and the rules of economics will govern," he said Tuesday. "Saudi Arabia will not singlehandedly balance the market in a downturn."

The low price of oil is hurting the pocketbooks of major energy companies. British energy company BP this week said it was enacting a company-wide pay freeze to cope with weak prices.

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Low energy prices mean a de facto economic stimulus for consumers in the United States, where shale oil production is pushing the crude oil market toward the supply side. Though rising because of seasonal refinery issues, U.S. retail gasoline prices are more than $1 per gallon less than they were at this point in 2014.

In a Monday assessment, the non-partisan Congressional Budget Office said the federal budget deficit is expected to shrink and remain stable under current laws.

"CBO anticipates that, under current law, economic activity will expand at a solid pace in 2015 and the next few years, reducing the amount of underused resources, or 'slack,' in the economy," it said.

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