Oil prices drift lower on U.S. GDP

NEW YORK, Dec. 22 (UPI) -- Crude oil prices edged lower in early Tuesday trading after the latest revision on the U.S. economy showed a modest decline for the third quarter.

The U.S. Commerce Department reported real gross domestic product increased at an annual rate of 2 percent in the third quarter, down from second quarter growth of 3.9 percent.

The government blamed the slower growth for the third quarter on the downturn in private investments and a decline in exports.

U.S. Federal Reserve Chairwoman Janet Yellen announced a decision to raise interest rates last week. Though the decision reflects confidence in the U.S. economy, Yellen said full-scale recovery is not yet complete.

The latest estimate from the Commerce Department for third quarter GDP was 0.1 percent less than the previous forecast.

Brent and West Texas Intermediate oil price indices are coming off a long slump, with Brent touching an 11-year low in Monday trading. For the February contract, Brent lost further ground to start the trading day in New York, falling about a half percent to $36.14 per barrel. WTI was down about 0.2 percent to $35.72 per barrel.

Crude oil prices are edging sharply lower, with prices off 15 percent for Brent and 11 percent for WTI since the beginning of December.

Lower oil prices are dragging on corporate profitability, with most major oil and gas companies cutting spending plans for 2016. The Commerce Department's latest snapshot said corporate profits declined $33 billion in the third quarter, compared with an increase of $70.4 billion for the second quarter of 2015.

China, meanwhile, is working to advance fiscal policies that ensure qualitative growth. An estimate from the Bank of China, Hong Kong, said the mainland economy in China will grow by 6.8 percent year, down from the 7.3 percent growth rate for the five-year period ending in 2015.