Oil prices stabilize after supply declined last month

By Allen Cone  |  July 13, 2017 at 10:51 AM
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July 13 (UPI) -- Oil prices were steady Thursday despite a report that the global supply rose last month by 720,000 barrels a day to 97.46 million a day.

Light, sweet crude oil futures had increased Wednesday after a buoyant economic future by Fed Chair Janet Yellen. Prices slumped upon opening but quickly recovered.

The September price for Brent crude oil was up 17 cents at 10:24 EDT to $47.91 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 20 cents percent to $45.69 per barrel for August.

The Paris-based International Energy Agency said supply rose as producers "opened the taps" daily on output from the Organization of the Petroleum Exporting Countries and non-OPEC producers such as the United States.

In its monthly report, OPEC said its members' combined average daily output rose by 340,000 barrels a day, mainly from Libya and Nigeria.

The two African nations are exempt from the OPEC-led deal to cut oil production as their oil production has been impacted by internal conflicts.

And production in Saudi Arabia has increased to meet summer electricity demand.

The IEA also raised its growth forecast to 1.5 percent this year to 98 million barrels a day from 100,000 barrels estimated last month.

On Thursday, Americans applying for unemployment benefits fell slightly in early July. Initial jobless claims in the period running from July 1-8 dropped by 3,000 to a seasonally adjusted 247,000, the Labor Department said. New applications for benefits have been below 300,000 for 123 straight weeks.

The Dow Jones Industrial Average was down 19.40 to 21,512.72 after reaching an all time high of 21,532. Stocks rose 123.07 points as Yellen said the central bank is likely to start reducing its massive $4.5 trillion portfolio later this year. In her semi-annual report to Congress, she gave a strong report on jobs, inflation, exports and consumer spending. The Fed also plans to keep increasing its benchmark interest rate.

"We're getting a positive reaction to her testimony," said Jeff Kravetz, regional investment strategist at the Private Client Reserve at U.S. Bank, told CNBC. "What happened was she was more dovish than the market expected in her prepared remarks."

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