June 21 (UPI) -- Crude oil prices moved deep into negative territory in early Thursday trading amid expectations of a consensus agreement from OPEC on future production.
The International Energy Agency has said the oil market is close to even in terms of the balance between supply and demand. Oversupply during the middle of the decade helped push crude oil prices below $30 per barrel, handicapping the economies of oil-rich countries and dragging on investments in the energy sector.
That balance, however, amplifies the market impact of things like lingering supply shortages from Venezuela, outages attributed to violence in Libya and the possible loss of Iranian barrels to U.S. sanctions. An oversupplied market has more tolerance for shocks.
Giovanni Stauvano, a commodity analyst at UBS, told UPI from the sidelines of a conference for ministers from the Organization of Petroleum Exporting Countries in Vienna that as much as 1 million barrels of extra oil per day could be put on the table for the second half of the year.
"The prospect of more barrels potentially returning has weighed on prices," he said. "It has still to be seen if this will be the final decision and how many are real ones, and how many are just paper ones."
The price for Brent crude oil, the global benchmark for the price of oil, was down 1.78 percent to $73.41 as of 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark, was down 1.05 percent to $65.02 per barrel.
Iran, Venezuela and some other members had balked at the idea of more barrels, but sentiment expressed in Vienna appears to be moving toward consensus on the need to keep the market stable.
On the economy, the Federal Reserve Bank of Philadelphia offered a mixed picture on the trajectory for the United States, the world's largest economy. Its manufacturing business outlook survey for June pointed to expansion in the manufacturing sector, a backbone of the U.S. economy, but new orders fell off sharply from May.
"Looking ahead six months, the firms [surveyed] remain optimistic overall, but the survey's future indicators continued to moderate," the bank reported.
The U.S. Labor Department reported first-time claims for unemployment for the week ending June 16 declined 3,000 from the previous week.