Aug. 2 (UPI) -- Crude oil prices were standing still in early Wednesday trading after the market turned south on signs of easing supply-side strains in the United States.
After a steady rally pushed major indices above the $50 mark for the first time in months, crude oil prices at one point dropped about 3 percent during the previous session. Late in the day, the American Petroleum Institute rattled the nerves of traders when it reported a build in U.S. crude oil inventories of about 1.8 million barrels and a strong gain for gasoline stocks.
Traders look at those figures to get an indication of market trends, with a build in inventories reflecting a market out of balance toward the supply side. U.S. demand for gas during the summer driving season is strong, though the official season is over next month. Crude oil stocks had moved lower, but higher inventories could indicate gains in production as oil prices edged higher for most of July.
Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter the API figures may be overinflated, but added to reports of waning compliance from members of the Organization of Petroleum Exporting Countries to pull oil prices "back from the big psychological resistance of $50 per barrel."
Official data from the U.S. Energy Information Administration is due out midway through the trading morning Wednesday. A survey of analysts early this week from S&P Global Platts found crude oil stockpiles are expected to drop by 2.8 million barrels from last week and gasoline inventories are expected to decline 1.3 million barrels in signs of a steady balancing in the energy market.
Oil prices moved between small gains and losses before the start of trading in New York. The price for Brent crude oil was up 0.39 percent at 9:15 EDT to $51.98 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.16 percent to $49.24 per barrel.
Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said through his official Twitter account that U.S. monthly data show U.S. oil demand was "very strong."
DOE monthly revisions show very strong US oil demand growth y/y of +820 kb/d in May. US oil demand is very solid.- petromatrix (@petromatrix) August 2, 2017
Private payroll processor ADP, meanwhile, reported private sector employment increased from June to July by 178,000, with the services sector far outpacing manufacturing.
"Job gains continued to be strong in the month of July," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. "However, as the labor market tightens employers may find it more difficult to recruit qualified workers."
Elsewhere, the European Commission reported Wednesday that optimism in the regional economy has recovered from the shock of the British divorce from the European Union.
"Close to a majority of Europeans are now also optimistic about the state of their national economy," its report read.