Crude oil prices moved lower in early Tuesday trading on expectations of a build in U.S. crude oil inventories, but the decline was subdued by acclimation.
Crude oil prices moved in volatile territory on Monday, reacting to weekend commentary on production levels from Saudi Arabia and Friday reports of increased exploration and production activity in the United States.
Total crude oil production from the United States is setting records at more than 10 million barrels per day on average so far this year, up more than 1 million barrels per day from this time in 2016. Analysis emailed from commodity pricing group S&P Global Platts said, however, that "trade flows have adjusted to avoid massive builds in stocks."
Stock levels matter for traders and investors looking at the balance between supply and demand. The market surplus that helped push crude oil prices below $30 per barrel is evaporating with the support of an effort led by the Organization of Petroleum Exporting Countries, but it's offset somewhat by U.S. production gains.
Platts said its survey of analysts showed an expected gain of 2.1 million barrels of oil last year. Total U.S. oil inventories are almost 100 million barrels below what they were last year, however.
"Crude is looking subdued, with one eye looking towards the latest inventory data," Matthew Smith, the director of commodity research at ClipperData, told UPI. "Although we are in the midst of refinery maintenance, low net imports mean we won't see a large crude build like we are accustomed to seeing at this time of year."
The price for Brent crude oil, the global benchmark, was down 0.01 percent as of 9:21 a.m. EST to $67.28 per barrel. West Texas Intermediate, the U.S. benchmark, was lower than the previous close by 0.11 percent to $63.84 per barrel.
Inventories typically swell ahead of a refinery maintenance period, though the five-year average is about 9.3 percent below what it was at the end of last year.
"A major factor putting downward pressure on U.S. crude inventories has been the combination of fewer imports and more exports," Platts Oil Futures Editor Geoffrey Craig said in a statement.
Industry data on U.S. inventory levels are expected from the American Petroleum Institute after the market closes. Federal data from the U.S. Energy Information Administration are published midway through the trading morning Wednesday. Platts, API and EIA data can vary considerably.
In broader economic terms, U.S. Federal Reserve Chairman Jerome Powell offered an upbeat forecast for the world's leading economy, allaying some early February concerns about overheating.
"The robust job market should continue to support growth in household incomes and consumer spending, solid economic growth among our trading partners should lead to further gains in U.S. exports, and upbeat business sentiment and strong sales growth will likely continue to boost business investment," he said in remarks prepared for the House Committee on Financial Services.
