Crude oil prices move into positive territory early Tuesday on expectations the amount of oil and gas held in storage in the United States declined. File photo by Monika Graff/UPI | License Photo
June 27 (UPI) -- Crude oil prices gained ground early Tuesday in anticipation of signs that stockpiles were lower, though a U.S. economic outlook could create headwinds.
Crude oil prices touched historic lows last week following earlier reports of building inventory levels for oil and gasoline in the United States, the world's top consumer and lead economy. U.S. oil production, meanwhile, has resisted market headwinds, with oilfield services company Baker Hughes reporting steady gains in exploration and production activity.
A report emailed from S&P Global Platts said the analysts it surveyed are expecting U.S. crude oil inventories to decline by 3.25 million barrels and gasoline stocks could drop 900,000 barrels.
"If confirmed, such a headline number would appear bearish," S&P Global Platts Oil Futures Editor Geoffrey Craig said in the emailed report
That comes as demand in the U.S. economy is expected to rise ahead of its Independence Day holiday, with motor club AAA forecasting 37.5 million people will hit the road for the events.
Crude oil prices were firmly in positive territory in early Tuesday trading. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.15 percent to $43.88 per barrel. The global benchmark, Brent, was up 1.4 percent about 15 minutes before the start of trading in New York to $46.47 per barrel.
Craig cautioned, however, that federal U.S. inventory levels for last week may be skewed because of the regional impact from Tropical Storm Cindy.
"There were 40 production platforms in the Gulf of Mexico that evacuated personnel last week in preparation for the storm," he said.
Elsewhere, broader markets could face headwinds after the International Monetary Fund said it lowered its outlook for the U.S. economy, saying it was unlikely growth under policies embraced by President Donald Trump would hit 3 percent. The IMF said full-year growth would be about 2.1 percent, down from the 2.3 percent forecast in April.
A March report from the Organization for Economic Cooperation and Development found North American growth "slowed sharply."
In its latest estimate in May, the U.S. Commerce Department reported real gross domestic production increased at an annual rate of 1.2 percent in the first quarter, an upward revision from previous estimates, but still lower than the 2.1 growth in GDP recorded in the fourth quarter.