Feb. 23 (UPI) -- Crude oil prices turned somewhat lower in early trading Friday after a report of easing supply-side strains became a bit more nuanced.
Crude oil prices entered the trading day Thursday under pressure from reports by the American Petroleum Institute and commodity pricing group S&P Global Platts that U.S. crude oil inventories were increasing just as total U.S. crude oil production is setting records.
U.S. oil production is offsetting the effort by the Organization of Petroleum Exporting Countries to erase a market surplus with coordinated production cuts. The U.S. Energy Information Administration, however, surprised the market by reporting that inventories declined 1.6 million barrels last week.
"After yesterday's inventory report brought focus back onto the fundamentals, prices today are back under the influence of broader markets, easing lower as the dollar rallies," Matthew Smith, the director of commodity research at ClipperData, told UPI.
Markets were moving between small gains and losses in overnight trading. The price for Brent crude oil, the global benchmark, was down 0.05 percent as of 9:18 a.m. EST to $66.36 per barrel. West Texas Intermediate, the U.S. benchmark, was down 0.06 percent to $62.73 per barrel.
Prices may be searching for new direction after a broader market correction period that met early February concerns about an overheating economy.
The price of oil may be influenced later in the day when Baker Hughes publishes its weekly rig count, which serves as a loose barometer to gauge activity in the exploration and production side of the energy sector. Any gains, particularly in North America, could push the price of oil lower as it would indicate the possibility for even more gains in production.
In terms of balance, Platts said in a commentary on EIA data that U.S. inventory levels are 1.4 percent above the five-year average, compared with a 38.7 surplus at this time last year. That comparison, however, is skewed toward the balance side because of large builds in inventories in the two years ending in 2017.
U.S. crude oil inventory declines may be supported in part by higher export levels, which topped 2 million barrels per day last week, and lower imports.