May 4 (UPI) -- Oil prices lost ground early Thursday as strong U.S. labor figures weren't enough offset production gains and slower declines in U.S. crude oil inventories.
Crude oil prices fluctuated between gains and losses for most of the session Wednesday following an official report on supply and demand metrics from the U.S. Energy Information Administration. Government data show crude oil inventories declined by 930,000 barrels for the week ending April 28 and gasoline stockpiles increased by 191,000 barrels, both moving far less in their respective directions than expected.
A glut of crude oil on the market helped push crude oil prices to historic lows last year, but the modest recovery has led to plans of expansion for major oil companies.
Continental Resources, one of the largest shale companies in the United States, offered a mix bag in its first quarter results, but said it was optimistic about the growth potential at the Bakken oil basin in North Dakota. Elsewhere, Norwegian energy company DNO said market conditions supported expansions to its operations in the Kurdish north of Iraq.
Tamas Varga, an analyst at London brokerage firm PVM, said in a daily newsletter that the latest figures from the United States, the world's largest economy, are "not so bullish" for crude oil.
"The hopes of U.S. stock rebalancing are being thrown into doubt," he said.
Crude oil prices were moving sharply lower in early Thursday trading. The price for Brent crude oil broke through a psychological threshold by losing 1.6 percent from the previous close to trade at $49.96 per barrel about a half hour before the start of U.S. trading. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.8 percent to $46.97 per barrel.
Demand dynamics could be influenced by a U.S. economy that's losing ground during the first quarter. Preliminary data for growth in first quarter gross domestic production came in below 1 percent, against 2.1 percent growth in the fourth quarter.
The U.S. Labor Department reported first-time jobless claims for the week ending April 29 declined by 19,000, though the less-volatile four-week moving average was up by 750 filings. The monthly report for April is due Friday.
Meanwhile, parties to an agreement to balance the markets by the Organization of Petroleum Exporting Countries meet later this month to consider an extension that, until Thursday trading, had established a floor price of crude oil at around $50 per barrel.
Russia, the largest contributor to the agreement among non-OPEC members, cast doubt over the deal by saying nothing formal has been decided in the Kremlin.