A late night rally in crude oil prices all-but vanished by the start of trading Tuesday amid some signs of a softening economy. File photo by Monika Graff/UPI |
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May 2 (UPI) -- Overnight gains in oil prices were fading in the moments before the start of trading in New York as investors take stock of emerging supply and demand trends.
Crude oil prices had recovered most of Monday's losses in overnight trading as analysts guessed at economic trends in the United States and China, the world's two largest economies. Oil prices moved lower Monday after a U.N. report predicted China's growth would moderate at least through next year, though growth still far outpaces the United States.
Geoffrey Craig, the oil futures editor for S&P Global Platts, said a survey of analyst sentiment revealed data this week will show U.S. crude stockpiles declined by 2.25 million barrels, a signal of easing supply strains. That's buffered, however, by an increase in gasoline stocks of 500,000 barrels.
"Not only have U.S. refiners been operating at record levels, but implied gasoline demand has been trailing the year-ago level, making it even more difficult for stocks to shed surplus barrels," he said in an emailed report.
After rising more than 1 percent overnight, crude oil prices were easing up in the minutes before the start of trading in New York. Brent crude oil was up 0.25 percent about 20 minutes before the U.S. market opened to $51.65 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up only 0.1 percent to $48.90 per barrel.
Markets could be tightening up as the failure of crude oil to break out of its narrow trading range could throttle future investments. Brian Gilvary, the chief financial officer for BP, said fundamentals were pointing to a market moving toward balance.
Ole Hansen, the head of commodity strategy at SaxoBank, told UPI, however, that "no fireworks can be expected unless we face a major and unforeseen supply disruption."
On the broader U.S. economy, Platts said a big market mover could be the April jobs report, which is due on Friday. Figures for the week ending April 22 show first-time claims for unemployment in the United States climbed 14,000 to 257,000. That followed a report showing growth in U.S. gross domestic product slipped below 1 percent during the first quarter, after a gain of around 2.1 percent in fourth quarter 2016.
