NEW YORK, June 1 (UPI) -- Crude oil prices turned lower in early Wednesday trading amid expectations of a status quo policy from OPEC and prospects of a global economy stuck in low gear.
Members of the Organization of Petroleum Exporting Countries meet Thursday for the first time since a proposal to freeze production at January levels collapsed after Iran said it would only consider its output once it regained a market position lost to economic sanctions.
De facto OPEC leader Saudi Arabia may be looking to market forces to sway the price of crude oil and the supply levels contributed from major producers. Lower crude oil prices have sidelined some production from the United States, though total OPEC production for April, the last full month for which data are available, is about a half percent higher than the average during the first quarter of the year.
Oil prices have held steady in the upper $40 range for several sessions as low production balances against higher demand for energy products from major economies. Angel Gurria, the secretary-general for the Organization Economic Cooperation and Development, said Wednesday from Paris the global economy is stalled.
"We see the world economy stuck in a low-growth trap," he said. "Global growth is projected to continue to limp along at around 3 percent this year, and to pick up only modestly in 2017."
Crude oil prices recoiled early Wednesday, falling further away from the psychological threshold of $50 per barrel. The price for Brent crude oil was off 1.7 percent to start the day at $49.05 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 1.6 percent to $48.32 per barrel.
Lower crude oil prices had strained output in North America, though Canadian energy company Husky Energy said Wednesday that, after retooling its portfolio, it would see momentum if oil stayed above $30 per barrel.
Among major economies, the OECD said China is expected to slip from a growth rate of 6.5 percent in 2016 to 6.2 percent next year. Japan, meanwhile, continues its contraction, slipping from 0.7 percent growth to 0.4 percent in 2017. Russia and Brazil linger in "deep recession," while the United States is expected to experience only moderate economic recovery over the next year.
Though for all 34 members, the OECD said growth moves from 1.8 percent in 2016 to 2.1 percent next year. OECD Chief Economist Catherine Mann said the longer slow growth persists, the harder it will be for policymakers to reverse course.
"If we don't take action to boost productivity and potential growth, both younger and older generations will be worse off," she said.