May 25 (UPI) -- A steady course on U.S.-North Korean détente and word of more oil from OPEC members helped push crude oil prices down sharply in early Friday trading.
U.S. President Donald Trump on Thursday cancelled a June summit with North Korean leader Kim Jong Un after Pyongyang made disparaging remarks about U.S. Vice President Mike Pence. That had the potential to unravel a thaw between two potential nuclear foes, but, by Friday, the president was welcoming a "warm and productive" posture from North Korea.
Nuclear tensions between the countries added a risk premium to the price of oil earlier this year. That market escalation coincided more or less with volatility in equities markets that sparked concern from U.S. and European federal bank chiefs.
Concerns about U.S. sanctions pressure on Iran, one of the top producers in the Organization of Petroleum Exporting Countries, and a historic decline in production from Venezuela helped push the price of Brent crude oil toward $80 in recent sessions.
The price for Brent crude oil was down 2.18 percent as of 9:15 a.m. EDT to $77.07 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 2.53 percent to $68.92 per barrel.
Ole Hanson, the head of commodity strategy at Danish investment firm Saxo Bank, told UPI the $80 per barrel mark was a breaking point for trading.
"Eighty dollars per barrel proved, at least for now, to be a line in the sand, and a level above which buyers lost interest and sellers emerged," he said.
That high-water mark had sparked concerns about global economic growth. U.N. Assistant Secretary-General for Economic Development Elliot Harris warned last week that trade risks and geopolitical tensions presented clear and present dangers to the global economy. The increase in commodity prices like oil will lead to inflationary pressures for some economies, but those pressures are more or less contained in the world's developed and developing economies.
Trump in April complained that OPEC was artificially pushing the price of oil higher. Hanson said Friday that OPEC members, supported by the Kremlin, were making market decisions of their own.
"Higher prices have begun to impact forward demand expectations and OPEC and Russia, being willing and able to increase production, may have been looking for a way out of the deal which would not upset the market too much," he said.