U.S. date on inventories and production pushed crude oil prices lower, though economic concerns ease in large part on support for Greece. Photo by Oskari Porkka/Shutterstock
NEW YORK, Aug. 20 (UPI) -- Crude oil prices moved lower with the U.S. benchmark moving toward the $40 mark Thursday, though signs continue to indicate economic recovery.
West Texas Intermediate, the U.S. benchmark for crude oil prices, lost a fraction of a percent from the previous close to trade at $40.64 for a new low mark for 2015. Brent crude oil lost 1 percent in early trading to trade at $46.66.
A volatile WTI is still trading for the September contract, while Brent moved into October. Jamie Webster, research director at IHS Energy, said in response to email questions WTI could be facing a steep turnaround when it moves into the October contract and could trend lower once oil services company Baker Hughes publishes weekly figures on the upstream oil and gas sector.
"WTI likely got oversold and will retest tomorrow if the rig count shows another increase, or next week if stocks rise again," he said.
Oil prices are driving lower in a market where supply far outweighs demand. In a mid-week report published Wednesday, the U.S. Energy Information Administration reported domestic crude oil inventories increased slightly from the previous week by about half a percent to 456.2 million barrels. At 9.3 million barrels per day, U.S. crude oil production was down about a half percent for the week but still at multi-year highs.
Demand concerns stem largely from weaknesses in the European and Asian economies. Concerns may abate, however, as the European Commission agreed in principle to a new three-year $95 billion loan package for Greece.
"The conclusion of this program is great news for Greece and the European Union as a whole, creating conditions for more growth, stability, investments and jobs," European Commissioner for Financial Affairs Pierre Moscovici said in a statement Thursday.
A Japanese contraction, coupled with a series of crashes on the Chinese stock market sparked concerns some of the expected demand in oil may subside. China, however, has infused cash into the market after devaluing its currency in an effort to ensure stable growth.
"The fast depreciation is over," Wang Han, an analyst at Industrial Securities, told China's official Xinhua News Agency. "Stabilizing will be the main theme."