Concerns about success of Abenomics, policies under Japan's Prime Minister Shinzo Abe, drag on crude oil prices in a weak market. Pool Photo by Mohamad Torokman/ UPI | License Photo
NEW YORK, Aug. 17 (UPI) -- An increase in production from U.S. shale basins and re-emerging concerns about the health of the Japanese economy pushed crude oil prices lower Monday.
Brent crude oil prices were relatively flat to start the trading day Monday, but stayed below the psychological $50 per barrel threshold to trade at $48.97 per barrel. West Texas Intermediate, the U.S. benchmark for crude oil prices, reached a new yearly low in early Monday trading at $41.73 per barrel, down about 1.8 percent from the previous close.
Crude oil prices are falling amid signs the weak market is doing little to counter lingering concerns about supply and demand dynamics. Mid-2014 signs of an oil surplus in a weak global economy helped push crude oil prices far below the $100 per barrel mark.
The European economy was under threat from lingering crises in Greece, though European Commission President Jean-Claude Juncker said support for a $95 billion support package would keep any major repercussions at bay.
"Greece is and will irreversibly remain a member of the Euro area," Juncker said. "And the European Commission will support Greece in developing a new and fair growth, jobs and investment perspective for its citizens."
European optimism, however, was countered by sentiments coming from Japan. Crude oil prices in early 2015 rallied after Japan reported real gross domestic product grew by 2.4 percent from January through March, an improvement over the revised 1.1 percent reported from October through December.
Japan, the world's third-largest economy, announced in February it exited two quarters of consecutive recession. The decline in crude oil prices Monday was in part in reaction to Tokyo reporting the economy declined at an annualized rate of 1.6 percent from April to June.
Japan's woes follow ongoing concerns about the growth trajectory in China. In the United States, where shale oil production is tipping the balance toward the supply side, the latest report from oil services company Baker Hughes shows drillers adding more U.S. rigs despite the industry downturn.
North Dakota, the No. 2 oil producer in the nation, showed a production increase in June that's just shy of the state's all-time record of 1.23 million barrels per day in December 2014, when WTI was consistently above $55 per barrel.