May 31 (UPI) -- A perfect storm of geopolitical and market issues put the $50 per barrel floor for crude oil prices under threat early in the Wednesday session.
Crude oil prices moved in volatile territory in Tuesday trading as investors searched for reasons to be optimistic after a decision last week from the Organization of Petroleum Exporting Countries to keep production levels static disappointment major market players. U.S. economic indicators from the United States, meanwhile, offered some surface support, but underlying figures on spending showed some negative pressures remain in the world's No. 1 economy.
Crude oil prices came under pressure in the overnight session on word that Libyan oil was again making a comeback. Industry reports emailed to UPI show the state-run oil company is anticipating a 60 percent increase in production from the average rate of 500,000 barrels per day.
On the market side, China's purchasing managers' index came in at a level for May that, at 51.2, showed expansion, but not enough to trigger widespread confidence. A report on the economic policies of Japanese Prime Minister Shinzo Abe from the International Monetary Fund, meanwhile, shows a troubled road.
"Fiscal policy targets are no longer seen as credible," the report read.
Meanwhile, reports early Wednesday that the party led by British Prime Minister Teresa May is slipping in the polls ahead of general elections are rattling confidence for investors watching the divorce from the European Union. A pending decision from U.S. President Donald Trump to pull out of the Paris climate deal is adding to the general sense of market upheaval.
The price for Brent crude oil was down 2.2 percent about 15 minutes before the start of trading in New York to $51.36 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 2.3 percent to $48.49 per barrel.
"This concurrent uptick in U.S. shale and Libyan oil output makes for a bearish cocktail and with concrete evidence of a drawdown in global oil stocks still in short supply, more pain lies on the horizon for beleaguered oil bulls," Stephen Brennock, an analyst at London broker PVM, said in a daily emailed newsletter.
Traders are waiting for the latest data on supply and demand factors from trade groups and the U.S. Energy Information Administration. Analysts surveyed by S&P Global Platts found crude oil stocks in the United States declined 3.2 million barrels last week, continuing with a steady trend of easing supply-side strains.
Geoffrey Craig, the oil futures editors for Platts, said in an emailed newsletter his focus was on imports to the U.S. market.
"Unless U.S. crude imports show signs of slowing down -- in line with stated intentions from OPEC and non-OPEC suppliers alike -- skeptical market bulls could continue to head for the exits," he said.