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Oil prices lower on U.S. GDP figures

Commerce Department revised first quarter growth to below 1 percent.

By Daniel J. Graeber
Crude oil prices move lower after the U.S. Commerce Department revised first quarter GDP growth to below 1 percent. File photo by Monika Graff/UPI
Crude oil prices move lower after the U.S. Commerce Department revised first quarter GDP growth to below 1 percent. File photo by Monika Graff/UPI | License Photo

NEW YORK, July 29 (UPI) -- A low estimate of U.S. gross domestic product and steep losses from some of the world's biggest energy companies sent crude oil prices down early Friday.

U.S. supermajor Chevron Corp. reported a loss of $1.5 billion, its third quarterly loss. "The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world," CEO John Watson said in a statement.

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The oil economy is far leaner than it was in 2014, when crude oil prices were holding above $100 per barrel on a consistent basis. From Russia to Texas, lower energy prices are causing ripples across the global economy.

The U.S. Commerce Department reported gross domestic product grew at a rate of 1.2 percent from April to June. First quarter growth was revised lower from 1.1 percent to 0.8 percent. While the labor sector is considered health and disposable personal income is on the rise, personal savings are down 10 percent from the first quarter.

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The price for Brent crude oil moved lower in the early rounds of the trading day Friday in New York, losing 1.4 percent to $42.11 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was down 0.5 percent to open at $40.94 per barrel.

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The U.S. Federal Reserve said earlier this week lower crude oil prices were in part behind a rate of inflation that's less than the 2 percent target rate. A report early this week from Morgan Stanley characterized its position on oil prices as bearish.

In Europe, seasonally adjusted GDP for the second quarter grew 0.3 percent for the 19 countries using the euro currency, compared with 0.6 percent during the first quarter. Europe's economic future is uncertain in the wake of the British referendum in June to leave the European Union.

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Crude oil prices fell early this week after the U.S. economy reported an increase in crude oil stockpiles. Oil markets may be influenced later in the day after Baker Hughes issues its report on rig activity for the week ending July 22. An increase may suggest investors are confident about stability in the market.

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