Upbeat producer sentiment offset GDP to push oil prices lower

Oct. 27 (UPI) -- Production expectations from energy companies during earnings season offset growth in the U.S. economy to pull the price of oil lower on Friday.

Reporting that revenue for Chevron Corp. improved by more than 50 percent from last year to $2 billion, Chairman and CEO John Watson said in a statement his company was doing more with less in the current market climate.

"We continue to see improvement in the underlying pattern of earnings and cash flow," he said. "Cash flow is at a positive inflection point, with oil and gas production increasing and capital spending falling."

The statement is dramatic for a company that saw its ranking lowered 104 points to 121 among top financial performers by commodity pricing group S&P Global Platts. Fourth-quarter 2016 results showed the company posted its first annual loss in decades.

Chevron reported a loss still from U.S. exploration and production of $26 million, though that's a big improvement over the $212 million loss a year earlier. Global net equivalent production of 2.72 million barrels of oil equivalent per day was better than a year ago by a half million barrels.

Traders have been watching the balance between supply and demand closely as supply-side strains last year pushed the price of oil below $30 per barrel. With oil moving toward $60, the head of Italian energy company Eni said he expected life would be easy and production gains supported.

Crude oil prices were bouncing around in negative territory overnight. After a banner day supported by rhetoric of extended production cuts by OPEC, the price for Brent crude oil was down 0.34 percent to $59.10 per barrel at 9:10 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.28 percent to $52.49 per barrel.

The price for crude oil may be reaching the point where shale oil producers ramp up activity, a possibility that could lead to higher production from the United States. The Organization of Petroleum Exporting Countries is trying to balance an over-supplied market with production cuts, though U.S. resilience has countered some of that impact.

Traders will get a better look at exploration and production trends when Baker Hughes publishes its weekly report, given as rig counts, later in the day.

Markets may react late in the session as analyst dig into the latest report on U.S. gross domestic product. The U.S. Bureau of Economic Analysis reported third quarter GDP increased at an annual rate of 3 percent, lower than the second quarter rate of 3.1 percent, but still healthy given the impact from the string of hurricanes that hit the United States and its island territories in the quarter.

The BEA reported disposable income increased, however, by 2.1 percent to $73.6 billion in the third quarter, lower than the 3.6 percent gain in the second quarter. Personal savings, meanwhile, of $494.8 billion were 9.3 percent lower than during the second quarter.