Oil prices lower on Yellen hangover

WASHINGTON, Aug. 29 (UPI) -- Crude oil prices moved sharply lower to start the trading day Monday as jitters carried over from last week's U.S. Federal Reserve statements on interest rates.

While raising the prospect that the U.S. economy was strong enough to cope with a hike in interest rates, U.S. Federal Reserve Chair Janet Yellen said Friday overall business investments were softer and U.S. economic growth was expected to be moderate.

Meanwhile during the weekend, Sinopec, one of the largest refineries in Asia, blamed moderate growth in the Chinese economy for declines in the first half of the year. Moderation in the leading economies of the world comes as members of the Organization of Petroleum Exporting Countries are producing oil at record levels, betting on a recovery in global demand.

In the United States, however, consumer demand could edge lower after the long Labor Day holiday as vacation-goers wrap up their holiday season.

The price for Brent crude oil moved lower by 1.4 percent to start the trading day Monday at $49.21 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, lost 1.6 percent to open at $46.85 per barrel.

Oil prices in August moved past the $50 per barrel mark amid word that some major producers would reconsider extraordinary action to stabilize markets during a meeting next month in Algeria. Some producers with weaker economies, like Venezuela, may support production moderation, though others, like Iran, are defending a robust market position.

Oil prices could face pressure in the coming days as producers in the U.S. Gulf of Mexico monitor weather developments in the region. British energy company BP said it evacuated non-essential staff from its platforms and rigs in the region because of the possibility of inclement weather.

The Gulf of Mexico accounts for 16 percent of the total oil and 4.5 percent of the total natural gas produced in the United States.