April 12 (UPI) -- Easing geopolitical tensions over Syria helped drag crude oil prices lower early Thursday, even as data show total OPEC crude oil production moved lower.
Crude oil prices are up more than 5 percent since the start of the week, largely supported by geopolitical risk tied to a possible multilateral military engagement in Syria. U.S. President Donald Trump spooked markets Wednesday by suggesting a missile strike could be imminent, but he walked back that rhetoric early Thursday.
Through his Twitter account, the president claimed he hadn't offered an indication of when a strike would take place.
"Could be very soon or not so soon at all!" he stated.
A more direct intervention in Syria would cause geopolitical fractures along multiple lines, given the potential for a response from U.S. adversaries ranging from Russia to Hezbollah. While Syria isn't an oil producer, the potential for spillover could be disruptive.
"Shale producers can't raise production quickly and the Gulf of Mexico is already exceeding expectations and that is why oil is acting so strong, even though it is unclear that an attack on Syria will disrupt any supply of oil at all," Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in market commentary emailed to UPI.
After several sessions of strong gains, oil prices edged lower nonetheless. The price for Brent crude oil, the global benchmark for the price of oil, was down 0.31 percent as of 9:15 a.m. EST to $71.84 per barrel. West Texas Intermediate, the U.S. benchmark, was down 0.19 percent to $66.69 per barrel.
U.S. data this week showed a surplus building in the domestic market, with crude oil inventory levels jumping more than 3 million barrels, contributing to the trend for crude oil prices early Thursday morning. The Organization of Petroleum Exporting Countries, meanwhile, reported that total member state output declined by an average 200,000 barrels per day last month. Only six of the 14 members reported gains in production, according to secondary sources reporting to OPEC economists.
Speaking from India on Wednesday, OPEC Secretary General Sanusi Barkindo said the effort to erase market surplus through coordinated production cuts "is well underway." OPEC's strategy, however, is offset by steady gains in U.S. crude oil production.
Tucked into a report on consumer fuels prices, meanwhile, was a forecast from the U.S. Energy Information Administration of a summer average for Brent of $63 per barrel.