Feb. 2 (UPI) -- Crude oil prices dropped into negative territory in early Friday trading following solid gains backed by emerging bullish sentiments about the market so far.
Crude oil prices jumped by as much as 2 percent during the Thursday session on emerging confidence building in a market only a few years removed from a severe contraction.
"Most major banks have now raised their forecasts and not least the one-third hike by Goldman Sachs yesterday received some attention," Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI. "Whether this represents a temporary peak in the market remains to be seen."
Prices were pressured early Friday by earnings from U.S. supermajors Exxon Mobil and Chevron. Despite pledging $50 billion in investments in U.S. shale oil over the next five years, Exxon in particular disappointed the market as a multi-billion dollar benefit from a U.S. tax overhaul masked some underlying weakness.
The price for Brent crude oil was down 1.3 percent as of 9:16 a.m EST to $68.72 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.7 percent to $65.33 per barrel.
Hanson said there was an apparent ceiling over the price of oil that wasn't much higher than the current rate. On Thursday, the bank-supported rally was extended after the U.S. government reported total production now rivaled that of Saudi Arabia.
"We also have to accept the current bullish sentiment, which was highlighted by the fact that oil rose on the day the U.S. Energy Information Administration said production had reached 10 million barrels per day, well before expectation, and that crude oil stocks had risen for the first time since November," he said.
Gains during the previous few sessions were supported somewhat by a decline in U.S. inventories of consumer fuels, a possible sign that demand was improving. On Thursday, the government reported a slight decline in worker productivity, however.
On the labor front, which offers an indication of the strength of the U.S. economy, the Labor Department reported total non-farm payrolls jumped 200,000 in January, led by everything from healthcare to manufacturing.
In January, hourly earnings across all non-farm sectors improved by 9 cents, following an 11 cent gain in December. For 2017, the Labor Department reported hourly earnings improved 2.9 percent.