Feb. 7 (UPI) -- Crude oil prices on Thursday showed a softer outlook with investors concerned about the direction of the global economy, and following only limited support after the latest United States inventory report showed a modest build.
As of 7:35 a.m. EST, West Texas Intermediate front-month crude future prices fell 0.9 percent to $53.53 per barrel, while Brent future prices fell 0.5 percent to $62.36 per barrel as of the same time.
"Crude is unwinding yesterday's rally, as economic concerns rise up once more and a stronger dollar provides headwinds," Matt Smith, director of commodity research at ClipperData, told UPI.
"The bigger picture remains one of consolidation -- prices lack the conviction to move higher amid the weakening economic backdrop, while OPEC production cuts and geopolitical issues relating to Venezuela and Libya are providing a backstop to a solid move lower," he added.
OPEC, and some non-OPEC countries led by Russia, had agreed to remove 1.2 million barrels of crude oil per day from the market starting Jan. 1 to help crude prices increase.
Venezuela, which produced 1.15 million barrels per day in December, was forced to look for alternative clients for its crude oil following sanctions that prevent the state oil company PDVSA from exporting to the U.S. unless the revenues are paid to opposition leader Juan Guaido.
Libya saw its December production impacted by internal violence, as the cut resulted from the shutdown of oil fields for safety after occupation by militia forces. Venezuela, on the other hand, has seen output production declines in recent years related to reduced maintenance and fewer upgrades amid economic difficulties, the Energy Information Administration has said.
On Wednesday, the EIA reported that for the week ended Feb. 1 that U.S. commercial crude oil inventories increased by 1.3 million barrels from the previous week.
"At 447.2 million barrels, U.S. crude oil inventories are about 6 percent above the five year average for this time of year," the EIA reported.
"Yesterday's EIA report provided some support via a smaller than expected build to crude stocks," Smith said. "The build was once again only modest, given stymied imports and strong exports. Gasoline stocks continue to climb higher on the East Coast amid strong imports, resulting in a build on the aggregate despite a drop on the Gulf Coast, he added.
According to a separate report by FXDailyReport analyst Katrina Ang, analysts expectations were for an inventory expansion of up to 2.2 million barrels.
While WTI crude future prices rose 0.7 percent on Wednesday, crude oil prices are down from $55.26 per barrel on Friday, its highest level for the year.
Prices have fluctuated from a high of $76.41 for barrel of WTI on Oct 3 down to levels under $43 per barrel during the Christmas holiday-shortened trading.
WTI prices were $46.54 per barrel at the start of the year, rising to current levels in part on geopolitical concerns about Venezuela, as well as on the possibility of an economic slowdown in China. U.S.-imposed trade tariffs would be expanded in China by March unless trade talks advance.