Aug. 16 (UPI) -- Crude oil prices were relatively steady early Wednesday as reports of a decline in U.S. crude oil inventories balanced against sentiment of an emerging ceiling.
Crude oil prices were moving higher in overnight trading after the American Petroleum Institute reported U.S. crude oil inventories declined a whopping 9.2 million barrels last week. Traders keep a close watch on inventory levels to get an indication of market tightening as the glut of oil on the global market acts as a governor on the price of oil.
Oil prices dropped below $30 per barrel last year under the dual strains of robust U.S. crude oil production and a strategy from the Organization of Petroleum Exporting Countries to defend their market share with more oil. OPEC in January enacted a measure that aims to ease the supply strains with managed production declines.
Ole Hanson, the head of commodity strategy at Saxo Bank, said in an emailed newsletter crude oil prices have lost ground since June and the possibility that crude oil prices move much higher than $50 per barrel is unlikely because OPEC is struggling to clear the oversupply.
The price for Brent crude oil was up 0.26 percent from the previous close to $50.95 per barrel at 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.25 percent to $47.67 per barrel.
Markets will be influenced late Wednesday morning when the U.S. Energy Information Administration releases official figures on crude oil and gasoline inventories. Traders may already be looking further ahead, however, as the late September end to the official U.S. summer travel season ends.
"A potential second counter-seasonal increase in gasoline stocks could have a dampening impact on what is expected to be the seventh consecutive weekly drop in oil stocks," Hanson said.
API figures tend to be considerably more bullish than official EIA figures. A survey of analyst sentiments compiled early this week by S&P Global Platts revealed expectations of a 3.6 million drop in U.S. crude oil inventories and a 400,000 barrel decline for gasoline. For crude oil inventories, that leaves the surplus at 23 percent above the five-year average, down from the 34 percent reported at the end of March.
For the broader markets, the U.S. Commerce Department reported new home construction dropped 4.8 percent from June and 5.6 percent lower than the same time last year.
In the European Union, meanwhile, data for the 19 countries that use the euro currency show gross domestic product increased 0.6 percent during the second quarter for 2.2 percent growth. That's slightly higher than the latest GDP growth estimate from the United States.