NEW YORK, Sept. 17 (UPI) -- A warning from the OECD on global economic growth and interest rate decisions expected from the U.S. Federal Reserve pushed oil prices lower early Thursday.
After a strong rally Wednesday, crude oil prices moved back into negative territory in early Thursday trading. At the open of trading in New York, Brent crude oil was trading down 1.1 percent from the previous close to $49.19 per barrel. West Texas Intermediate, the U.S. benchmark for crude oil prices, moved down about a half percent to $46.92 per barrel.
Global markets were mixed as investors awaited a decision from the U.S. Federal Reserve. Hiking interest rates could send oil prices, down more than 50 percent year-on-year, even lower.
Minutes published Wednesday from a July meeting of the Fed gave an indication of the board's position.
"Most [members] judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point," the minutes read.
The Organization of Economic Cooperation and Development said in a statement global economic growth was sub-par. The European economy was improving, but not very quickly. Asian economies, meanwhile, are slowing on the back of a struggling Japan and a weakening China. For the United States, consumer spending is improving along with the labor market, but investment rates are disappointing.
"The U.S. Federal Reserve will soon need to begin to raise its policy rate at a gradual pace, given the solid growth of the U.S. economy and concerns over asset prices," the OECD said. "The timing of the first rate rise will make little difference to the outcome, but the pace of increase does matter."
The Federal Reserve minutes said investment was expected to increase during the second half of 2015, but added declines in crude oil prices may continue to curb activity in the energy sector.
OECD said the Chinese economy is expected to shrink by 0.2 percent next year to 6.5 percent, the European economy expands by 0.3 percent to 1.9 percent and the United States grows by 0.2 percent to 2.6 percent in July.
Fed minutes from July, however, show a modest level of optimism.
"Most contacts viewed the recent slowdown in manufacturing as likely to prove temporary and remained optimistic about future demand, even though the recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China raised some concerns," the minutes read.
U.S. investment bank Goldman Sachs forecast oil prices moving to as low as $20 per barrel. A report last week from the U.S. Energy Information Administration said oil could be as low as $32 per barrel.