May 30 (UPI) -- Lingering disappointment over last week's OPEC decision to keep production cuts stable and lingering supply-side strains pushed oil prices lower early Tuesday.
Crude oil prices on Friday clawed back from a loss of roughly 5 percent following a decision by the Organization of Petroleum Exporting Countries to extend a production arrangement into early 2018, three months longer than initially planned.
That decision undercut a bullish sentiment that was supported by suggestions that parties to the deal could cut production levels deeper or extend the agreement for a full year.
Market players also may be waiting for travel figures from the United States to offer an indication of consumer demand following the long Memorial Day holiday weekend. Last week, motor club AAA predicted 90 percent of the 39.3 million people expected to travel during the holiday would take to the roads, a 2.4 increase from last year. In an early read on holiday travel figures, Dan McTeague, a senior analyst with GasBuddy, said energy markets, however, are coping with a "disappointing demand picture."
The price for Brent crude oil was down 1.4 percent about 15 minutes before the start of trading in New York to $51.41 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 0.92 percent to $49.35 per barrel.
At the consumer level, McTeague said summer travel in the United States, the world's leading economy, should increase 7 percent from last year, but better fuel economy means gasoline inventories are still higher, clouding the demand picture.
Elsewhere, the U.S. Commerce Department reported that spending by American consumers increased 0.4 percent from last month in a sign that growth was accelerating. Consumer spending accounts for about 60 percent of total U.S. economic activity and the gains in April followed a lackluster 0.2 percent increase the previous month.
On Friday, the Commerce Department revised first quarter gross domestic product from 0.7 percent growth to 1.2 percent, adding support to the late week rally in crude oil prices. Fourth quarter GPD showed a gain of 2.1 percent and Tuesday's growth in consumer spending is still less than levels from January and February.