Rally in oil prices loses steam after revision to U.S. GDP

June 28 (UPI) -- Crude oil prices lost some ground in early Thursday trading after weaker-than-expected U.S. economic data offset looming supply-side pressures.

Crude oil prices have spiked sharply this week amid concerns about chronic production challenges in Venezuela, national security issues in the Libyan oil belt and future challenges for Iranian oil exports.

Markets cooled off somewhat after the U.S. Commerce Department released its latest estimate on growth in gross domestic product for the first quarter. According to the third estimate, U.S. GDP increased at an annual rate of 2 percent, down from the previous estimate of 2.2 percent.

Fourth quarter GDP increased 2.9 percent. The downward revision to first quarter GDP comes amid looming global trade tensions that could undermine growth in the world's leading economies.

Crude oil prices were relatively flat ahead of the start of trading in the United States. Brent crude oil, the global benchmark for the price of oil, was down 0.03 percent as of 9:15 a.m. EDT to $77.44 per barrel. West Texas Intermediate, the U.S. benchmark, was down 0.25 percent to $72.58 per barrel, but still at a level not seen since late 2014.

The downturn for the price of oil was dampened by lingering supply-side concerns. The U.S. State Department said this week it wanted to see Iranian exports drop to zero by November and, on Thursday, the United Nations said it was concerned about the security situation in Libya.

Prices were supported by a decision by the Organization of Petroleum Exporting Countries to put more oil on the market in the second half of year. The pledge to reduce compliance with a deal that pulled oil away from historic lows of sub-$30 per barrel wasn't enough, however, to offset the real loss of barrels expected later this year.

Ole Hansen, the head of commodity strategy at Danish investment firm Saxo Bank, said in response to questions from UPI that the oil market was going through a shift where neither supply nor demand scenarios were very clear. He added that said some of the concerns about the loss of oil barrels could be offset by signs of a weaker global economy.

"A trade war has no winner, only a lot of losers and the first loser is likely to be growth and with that demand," he said.