Feb. 9 (UPI) -- Crude oil prices continued their losses in early Friday trading amid broad-based volatility and mounting concerns of supply-side pressures.
Oil prices have lost all of the ground gained during a rally that extended through most of January. Along with major U.S. stock indices, crude oil prices settled above multi-year highs last month.
Market support came from heightened geopolitical risk, strong economic data and the start of the second year of an effort by the Organization of Petroleum Exporting Countries to balance an oversupplied market with production cuts.
Consumers in the United States, the world's leading economy, are continuing to show strong demand behavior. Motor club AAA reported Friday that consumer demand for gasoline was already above where it was in March last year.
"Among factors, strong consumer confidence in the economy has contributed to drivers using more gasoline than usual this winter," a AAA statement read.
Demand, however, isn't enough to stave off concerns that higher prices will bring back some of the supply-side pressure that pushed oil prices to historic lows a few years ago. U.S. shale oil producers, responding in part to improved market conditions, have helped push total production above 10 million barrels per day, meaning U.S. production is more than Saudi Arabia's.
The price for Brent crude oil was down 0.77 percent as of 9:13 a.m. EST to $64.31 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.1 percent to $60.48 per barrel.
Analysts commenting on sharp declines in U.S. stock markets and commodity prices said the trend is indicative of a correction more than a sign of economic problems ahead.
The U.S. government, meanwhile, shut down briefly overnight as lawmakers debated the latest budget effort. A bipartisan effort was successful early Friday with a bill that calls for the sale of barrels from the U.S. Strategic Petroleum Reserve.
Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in market commentary emailed to UPI that another 100 million barrels of oil could be on the market through 2027, cutting the SPR volume almost in half. This, he said, may be another contributing factor for Friday losses.
"Still I think the market will be able to gobble up that extra supply and it should cause some concern for producers that may want to make sure they are profitable before they bring on more supply," he said.