April 20 (UPI) -- Crude oil prices moved lower in early Thursday trading, continuing a downturn sparked by demand-driven factors in the U.S. energy market.
Crude oil closed down sharply by the end of the trading day Wednesday after investors mulled over the latest data set from the U.S. Energy Information Administration. The official data from the United States, the world's leading economy, provide indications of market factors related to supply and demand by way of inventory levels for oil and gasoline.
EIA reported crude oil stocks down 1 million barrels and total stocks down 1.1 million barrels from one year ago. That could indicate fading strains from an oversupplied market, though U.S. crude oil production continues its build beyond 9 million barrels per day, offsetting the decline in oil inventories to some extent.
Stephen Brennock, of broker PVM in London, said in a daily newsletter the defeat for crude oil prices Wednesday came not from oil inventories but gasoline stocks, which posted their first build in nine weeks and offer a glimpse of consumer demand.
"The rebalancing in U.S. crude stocks may have got underway but concerns of further gasoline builds are rife even as the U.S. summer driving season shifts up a gear," he said. "With questions hanging over U.S. gasoline demand, any further product builds will act as a brake on the oil price recovery."
Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in a daily newsletter that extending an agreement led by the Organization of Petroleum Exporting Countries is all-but certain, though questions have surfaced over how long the extension would last. Now, he said, there's a chance it would extend for three months, instead of six.
On one hand, the three-month window could give oil ministers in the Middle East the room to maneuver through rhetoric, he said.
"But on the other hand it could indicate some increasing resistance by certain OPEC or non-OPEC countries for an extension to the end of the year as they were planning an increase of production in the fourth quarter," he said.
Markets could be under further pressure on the latest U.S. labor figures. The government reported first-time claims for unemployment for the week ending April 15 up 10,000 from the previous week to 244,000. The less-volatile four-week moving average declined 4,250.