Crude oil prices retreat further away from the $50 mark on signs an expected return to balance has yet to occur. File photo by Monika Graff/UPI | License Photo
NEW YORK, Sept. 1 (UPI) -- Tepid labor reports from the United States and signs that global crude oil supplies were accumulating sent oil prices lower at the start of trading Thursday.
Crude oil prices started Wednesday in negative territory as market analysts discounted any signs of bullish momentum building in the second half of the year. Prices turned sharply lower late morning Wednesday after the U.S. Energy Information Administration reported a larger-than-expected increase in U.S. crude oil stockpiles.
Heavy supply and lower demand helped pull oil prices from $100 per barrel in 2014 to lower than $30 per barrel in early 2016. The reaction to EIA's report on U.S. crude oil inventories was doubled by data showing production from some members of the Organization of Petroleum Exporting Countries was at or near record highs.
The price for Brent crude oil was down 1.4 percent to start the trading day in New York at $46.22 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was off 1.5 percent to $44.05 per barrel.
On the consumption side, the U.S. Labor Department reported first-time claims for unemployment for the week ending Aug. 27 increased 2,000 over the previous week, though the less-volatile four-week moving average was lowered by 1,000.
Oil-rich North Dakota had the third-largest increase in initial claims for the week ending Aug. 20, the Labor Department said, though the shale state of Oklahoma was among those with the largest decline.
A separate report from the Labor Departments showed some sectors of the U.S. workforce are putting in fewer hours. Manufacturing productivity declined 0.4 percent for the second quarter as hours worked declined in parallel. Less productivity could be a restraining factor on wages, which have not kept pace with an otherwise healthy U.S. labor sector.
The lukewarm results from the U.S. Labor Department, coupled with higher levels of supply and production, could erase sentiments from earlier this year that some of the oversupply that helped drag crude oil prices lower had evaporated.