NEW YORK, May 17 (UPI) -- Crude oil prices moved lower in early Tuesday trading after U.S. data showed the consumer price index increased at its fastest pace in more than three years.
The index, which serves as a barometer to gauge inflation, increased 0.4 percent in April and, over the last year, rose 1.1 percent for all consumer items on a seasonally adjusted basis.
"The seasonally adjusted all items increase was broad-based, with the indexes for food, energy, and all items less food and energy all rising in April," the U.S. Labor Department said.
For energy prices, the index rose 3.4 percent last month for its largest increase since February 2013, after rising just 0.9 percent in March. Employment remains healthy for the U.S. economy, though with wage growth relatively static, consumers may be demanding less, but paying more for the goods and services they need.
Crude oil prices have rallied in recent weeks amid signs supply and demand were returning to balance. Lackluster global economic growth over the last two years dragged on energy prices in a market flush with oil.
Brent crude oil, now trading in the July contract, moved lower by 0.2 percent at the start of the trading day in New York to $48.88 per barrel, after a strong rally Monday triggered by supply concerns in Canada and Nigeria. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.3 percent to open at $47.86 per barrel before the expiration of June contracts.
Recent upward trends were supported by signs of modest growth in the Chinese and Indian economies. In April, the Organization for Economic Cooperation and Development reported real gross domestic product growth across the 34 member states declined 0.4 percent in the fourth quarter, which it said was a reflection of a decline in private-sector consumption.
The U.S. Commerce Department last reported that real gross domestic product increased at an annual rate of 0.5 percent in the first quarter, down from the 1.4 percent growth rate in the fourth quarter.
On the supply side, an annual survey from the U.S. Energy Information Administration confirms the pressure from lower crude oil prices is hurting the shale industry. U.S. crude oil production is expected to decline 8.5 percent next year to 8.6 million barrels per day. By 2040, however, U.S. production is expected to reach 11.3 million bpd.