Oil prices get modest lift off U.S. income data

NEW YORK, May 31 (UPI) -- An increase in personal income in the United States helped add momentum to a rally in crude oil, with prices holding near the $50 per barrel mark early Tuesday.

Early this year, U.S. Federal Reserve Chair Janet Yellen warned financial conditions in the country were less supportive of growth and the labor market could turn lower as a result. Last week, however, she said the U.S. economy had recovered enough to withstand a rate increase during the summer.

Federal Reserve Governor Jerome Powell said last week that recent spending data have been less positive than improvements in the labor market and gross domestic product overall was still around 1 percent. Nevertheless, retail sales were up and lower gasoline prices were supportive of an improvement on consumer confidence.

The U.S. Bureau of Economic Analysis on Tuesday reported personal income increased 0.4 percent, or $69.8 billion, in April. That's unchanged from the previous month, but up from the 0.1 percent reported for February.

"Wages and salaries increased $38.6 billion in April, compared with an increase of $30.7 billion in March," the government reported.

The market for crude oil opened after the long Memorial Day holiday weekend in the United States in a modest rally. The price for Brent crude oil moved up 0.4 percent to $49.51 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, gained 0.48 percent to start the day at $49.57.

The federal government revised first quarter growth in gross domestic product upward slightly last week to 0.8 percent, noting positive contributions from state and local government spending, as well as personal consumption expenditures. U.S. fourth quarter GDP increased 1.4 percent.

Powell said last week GDP was on pace to recover to around 2.2 percent for the second quarter.

The rally Tuesday may be subdued as traders wait for any developments from the Organization of Petroleum Exporting Countries, who meet Thursday for the first time since an early 2016 proposal to freeze oil production collapsed. Expectations of any major announcement, however, are low as de facto OPEC leader Saudi Arabia charts a new course under Saudi Oil Minister Khalid al-Falih.

Falih, the head of state oil company Saudi Aramco, said last year that supply, demand and economic fundamentals would be the governing factors for oil markets.