Crude oil prices up, but remain erratic, as supply-side concerns resurface after initial signs of an emerging surplus. File Photo by John Angelillo/UPI |
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July 20 (UPI) -- Monetary policy balanced against renewed questions about the supply of crude oil in the second half of the year to add volatility Friday to the price for oil.
Crude oil prices moved erratically in Thursday trading as calls for restraint from Saudi Arabia offset gains in U.S. oil storage and production. There was a brief sigh of relief over the lack of spare capacity, the amount of oil producers could put on the market in short order, though those concerns resurfaced on Friday.
"Even with U.S. record production, the combination of record oil demand, along with declining production from Venezuela and sanctions on Iran, we will be in a supply deficit when we see the end of the year demand increases kick in," Phil Flynn of the PRICES Futures Group in Chicago said in a morning market newsletter.
Oil prices in overnight trading were moving between big gains and minor losses, especially for West Texas Intermediate, the U.S. benchmark for the price of oil.
The price for Brent crude oil was up 1 percent to $73.33 per barrel as of 9:20 a.m. EDT. The price for WTI was up 0.38 percent to $68.50 per barrel. Brent closed Monday at $71.84 per barrel.
The start of earnings season for the second quarter offers a snapshot about future expectations for energy markets. Lower oil prices two years ago left bruises on the financial reports for energy companies, especially those working on the exploration and production side of the sector.
On Friday, oilfield services company Schlumberger, one of the largest companies of its kind in the world, reported second quarter revenue of $8.3 billion, up 6 percent from the first quarter.
"Spare production capacity, which is essentially limited to only a few OPEC countries, is now nearing its lowest level for more than a decade while decline in the world's mature production base continues to accelerate," CEO Paal Kibsgaard said.
The price of oil may be influenced by movements in the value of the U.S. dollar. U.S. President Donald Trump has recently expressed distaste for Federal Reserve policies and those comments could impact the greenback. The strength of the U.S. dollar has an inverse relationship to the price of oil.
