July 17 (UPI) — Crude oil prices struggled to continue the upward momentum Monday even as China, the world’s second-largest economy, reported better-than-expected expansion.
Crude oil prices ended each trading day last week in positive territory on signs that commercial stockpiles of oil in the United States, the world’s largest oil consumer, were on the decline. Markets Friday were supportedfurther by a halt to crude oil exports from Nigeria from Royal Dutch Shell because of circumstances beyond its control.
Demand could be supported by first-half data from China, the second-largest economy, behind the United States. Gross domestic product for the first six months of 2017 grew by 6.9 percent, above the government’s target rate of 6.5 percent.
Xing Zhihong, a spokesperson for the National Bureau of Statistics, was quoted by the official Xinhua News Agency as saying the economy was “laying a solid foundation for achieving the annual target.”
Crude oil prices were nevertheless sliding in early Monday trading as investors looked ahead to next week, when parties to an OPEC-led effort to balance the market meet to review the impacts.
The price for Brent crude oil was relatively unchanged from Friday’s close at 9:00 EDT to trade at $48.90 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.21 percent to $46.44 per barrel.
Indications from reports from the economists at the Organization of Petroleum Exporting Countries, the International Energy Agency and the U.S. Energy Information Administration are that markets will tighten up during the second half of the year, which would offer support for crude oil prices.
Balance is supported in part by the effort by OPEC to ease the supply-side strains with managed production cuts. Nigeria, despite its recent shut in, and Libya have added to those strains because they’re exempt from the agreement so they can steer revenue toward national security efforts.
Tamas Varga, an analyst with London oil broker PVM, said in an emailed market report that if OPEC can’t agree on quotas that consider member states Nigeria and Libya, then balance is in jeopardy.
“The second-half stock draw will be nothing short of a dream [without tighter quotas],” he wrote.
Meanwhile, a report from the Federal Reserve Bank of New York found regional employment gains were small, while the numbers of hours worked was unchanged. In its snapshot for July, the bank said firms responding to its survey were less optimistic than they were in June.
“Growth continues, though not quite as strongly,” the report read.