NEW YORK, Nov. 19 (UPI) -- A call for robust production from the Saudi oil minister added negative pressure to crude oil prices in early Thursday trading.
Brent crude oil moved back from Wednesday gains supported by U.S. data showing some of the crude oil stockpiles were released into the market. Brent started the trading day relatively unchanged from the previous close, but drifting lower to $44.06 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, at one point dipped below the $40 mark before recovering. WTI early Thursday, however, was down 1.2 percent from the previous day's close to $40.23 per barrel.
Crude oil prices are moving lower in a market favoring the supply side. Most global economies that are growing are doing so slowly, leading to depressed demand. Saudi Oil Minister Ali al-Naimi was quoted by the Wall Street Journal as saying Thursday energy companies should be investing heavily because demand was expected to return.
"There is a big drop in the production capacity of oil wells across the world, estimated around 4 million barrels a day, which means the petroleum industry needs new additional production capacity of around 5 million barrels a day every year," he said from Manama.
In the United States, the president of the Dallas Federal Reserve said world oil production exceeds consumption by about 1.6 million bpd. Bank President Robert Steven Kaplan said balance won't return to the market until at least late 2016, with supply reductions from higher-cost producers contributing to the process.
"Excess oil inventories now stand at record levels," he said.