Dec. 6 (UPI) -- Crude oil prices lost ground early Wednesday on a build in U.S. gasoline supplies, an indication of lower demand, and fears about the global economy.
Oil prices came under pressure Tuesday when the Organization of Economic Cooperation and Development said inflation moved lower for the world's major industrialized economies. That followed an OECD warning the previous week of red lights flashing on some economic gauges.
Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in a commentary emailed to UPI that other commodities like copper were on the decline because of a surge in supply, which by his read means China's economy may be slowing down.
China is the second-largest economy in the world behind the United States and data published late Tuesday by the American Petroleum Institute on gasoline inventories suggested "no one traveled on Thanksgiving," Flynn said.
The price for Brent crude oil was down 0.94 percent from the previous close to trade at $62.27 per barrel as of 9:15 a.m. EST. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.1 percent to $56.95 per barrel.
Oil prices had been on a long rally for most of the latter half of the year in anticipation of a decision from the Organization of Petroleum Exporting Countries on what to do with a production cut agreement aimed at draining the surplus in global oil inventories. With a decision made last week to extend the deal to the end of 2018, traders are focusing more on fundamentals than rumors.
Federal U.S. data on oil and gasoline supplies comes out late in the trading morning on Wednesday. Traders have been at odds over frequent discrepancies between the API, which is also the oil and gas industry's main lobby, and the U.S. Energy Information Administration, an independent division of the Energy Department.
EIA data, once it's released, will help determine the direction for crude oil prices for the rest of the trading day and into Thursday morning.
Stephen Brennock, an analyst with London oil broker PVM, said in an emailed market report that geopolitical issues may be the next wildcard for the price of oil. From U.S. President Donald Trump's decision to recognize Jerusalem as the Israeli capital, to simmering rivalries between Middle East powers, a risk premium may be on the horizon.
"Yet should the supply outlook fail to worsen, the odds are that oil prices will hover around current levels until next June," Brennock added.