Oil prices in modest decline in Friday's waiting game

March 31 (UPI) -- Crude oil prices drifted lower in early Friday trading as markets relax following two consecutive days of gains ahead of a key meeting of OPEC ministers.

Signs of easing supply-side pressures this week pulled the price of West Texas Intermediate crude oil back above the psychological threshold of $50 per barrel, after lingering in the upper $40 range for most of the latter half of March.

Michael Wittner, the global head of oil research at Societe Generale, said U.S. data on inventories for crude oil were concerning because of the steady build, but bullish for products like gasoline and diesel.

"However, on balance, the statistics were bullish," he said in a semi-regular report.

The early morning focus could shift to supply-side concerns ahead of a report from oilfield services company Baker Hughes on exploration and production activity. Published as rig counts, the figures give an indication of confidence in a particular region and gains in North America could offset some of the optimism over easing supply-side pressures. On the concerns about supplies, the steady gains in U.S. crude oil inventories prompted Wittner to make note of "slightly bearish" conditions.

Overnight declines moderated in the minutes before the start of trading in New York. The price for Brent crude oil was down 0.15 percent about a half hour before the open to $53.05 per barrel. WTI, the U.S. benchmark for the price of oil, was down 0.14 percent to $50.28 per barrel.

Oil prices could move higher in the trading day amid ongoing signs of instability in Venezuela, a member of the Organization of Petroleum Exporting Countries. President Nicolas Maduro is consolidating control over the government, prompting concerns about national security.

The U.S. Embassy in Caracas issued an advisory to any U.S. citizens in Venezuela warning of the potential for violence given reports of political protests planned for Friday afternoon local time.

OPEC ministers meet next month to consider extending a six-month agreement to curb production in an effort to balance the market. OPEC's move to draft the agreement in November helped pull oil prices out of a long period of underperformance.

Stephen Brennock, an analyst with the broker PVM, said in a daily newsletter that movement in oil prices depends on the time line because some U.S. oil producers can now turn a profit even if oil prices dip into the $30 range.

"While this will underpin a prolonged period of growth in US crude production, it will in the short-term cap the oil price upside which in turn will fuel fears of a looming supply crunch as investment in long-cycle projects dries up," he said.