Stand-still economy drags on oil prices

NEW YORK, Nov. 12 (UPI) -- Few signs of global economic momentum pushed crude oil prices sharply lower in early Thursday trading, as slow U.S. growth balances tepid global gains.

The U.S. Labor Department said the number of people filing for unemployment protection was unchanged from the previous week to 276,000. The four-week moving average was adjusted upward, however, by 5,000 to 267,750.

The U.S. and other major economies are growing, but at a slow pace. Low energy prices are acting as a de facto stimulus for consumers, though wage growth remains anemic. In its monthly report for November, the Organization of Petroleum Exporting Countries said the global economy was expected to expand at around 3.1 percent for 2015. U.S. growth remains lower at 2.4 percent in 2015 and 2.5 percent in 2016.

Crude oil prices fell dramatically at the start of trading in New York. Brent crude oil was down 2.2 percent to $44.80 per barrel. West Texas Intermediate, the U.S. benchmark for the price of crude oil, mirrored Brent's decline, falling 2.2 percent from the previous session to $41.97 per barrel.

OPEC left its demand forecast for total global oil demand unchanged at an average 92.9 million barrels per day. That should increase 1.3 percent next year to 94.1 million bpd, also unchanged from the previous month's report.

OPEC in its forecast said the decline in oil prices should encourage additional demand while at the same time pushing some production in higher-cost markets out of the picture. This, in part, could help "support a recovery of crude oil prices in the coming months," the report read.

Recovery is expected to be modest, however. Earlier this week, the Bank of England forecast a price per barrel at around $62 in 2018, while Fitch Ratings said Brent should average around $65 per barrel next year. In a report earlier this week, the International Energy Agency said crude oil prices won't move above $80 per barrel until the next decade.