Oil prices move lower after an assessment from the International Energy Agency casts doubt on market balance. File photo by Monika Graff/UPI | License Photo
NEW YORK, Nov. 10 (UPI) -- Oil prices moved lower in early Thursday trading after the IEA said there may be too many factors at play to continue betting on OPEC's production offer.
Crude prices moved in parallel with global markets in the wake of the surprise U.S. election of Republican Donald Trump, dropping in early Wednesday morning trading but recovering by the end of the day. Traders shifted some of their focus away from the U.S. transition as business continued more or less as usual.
The International Energy Agency said its outlook for growth in global oil demand was holding steady, noting there was little evidence to suggest robust economic expansion next year. By its estimate, OPEC, the world's major supplier of oil, is producing around 33.8 million barrels of oil per day, more than the high end of a production ceiling offered during September meetings in Algeria.
The OPEC production proposal is not the only market factor, the IEA said, as producers outside the group are increasing their oil output.
"Unfortunately for those seeking higher prices, an analysis of the other components provides little comfort," the IEA's report read.
Oil prices collapsed in early 2016 as markets heavily favored the supply side and the IEA's assessment offered little short-term solace for balance. The price for Brent crude oil was down 1 percent to start the trading day at $45.90 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was off 1.3 percent from the previous session to open in New York at $44.67 per barrel.
The IEA said that, if OPEC acts, the market will move toward a deficit "very quickly." If it doesn't, and some members keep producing oil at record levels, the market will remain in surplus.
"Indeed, if the supply surplus persists in 2017 there must be some risk of prices falling back," it said.
In the economy, the U.S. Labor Department said this week that hiring was at a relative standstill. On the last day in September, there were 5.5 million job openings, relatively unchanged from the previous month. Hiring edged lower, meanwhile, to 5.1 million. Layoffs and discharges declined slightly as well.
On Thursday, the Labor Department reported seasonally adjusted first-time claims for unemployment for the week ending Nov. 5 moved lower by 11,000 to 254,000. The four-week moving average, a less-volatile measurement, edged higher by 1,750.