May 8 (UPI) -- Crude oil prices were looking for momentum from the French presidential election and from OPEC production cut agreements, but Monday was off to a slow start.
French voters moved in favor of centrist candidate Emmanuel Macron in the Sunday election in a rebuke of the populist far-right Marine Le Pen, who called for a French exit from the European Union during her campaign.
Crude oil prices shot up initially after the vote, but faltered as markets woke up Monday morning. The French CAC 40 index was down about 1 percent. After both candidates emerged from the May 7 runoff, market analysts looked at Macron's pro-EU stance as supportive of crude oil prices.
Crude oil prices were moving between small gains and losses after an initial overnight surge. The price for Brent crude oil was down 0.8 percent about a half hour before the start of trading in New York to $48.71 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.76 percent to $45.87 per barrel.
The swings come despite support from Russia and Saudi Arabia for extending a six-month deal to help balance the market through managed production declines. When implemented in January, the deal to sideline more than 1 million barrels per day put a $50 floor under crude oil prices, though that threshold collapsed last week as it became evident that balance was taking longer than expected.
Cailin Birch, a commodities analyst at the Economist Intelligence Unit, said in a research note emailed to UPI that comments on the extension offer a prelude to May 25 official talks on extending the deal possibly beyond 2017. According to Birch, however, the deal may not be panning out as expected.
"An extension of the agreement will not be enough to raise global oil prices significantly," she said. "Several factors will continue to weigh on oil prices, including the rapid rise in U.S. oil production --which is set to expand by over 3 percent in 2017 -- ample global supply, and only modest growth in global oil consumption."
An OPEC policy in early 2016 to defend a market share with a robust production strategy pushed oil prices to historic lows and sidelined some of the investment potential in U.S. shale. The OPEC-supported $50 floor for most of 2017 is in shale's favor and complicates balance efforts.