Slow Demand Pushes Oil Prices LowerNEW YORK, June 5 (UPI) — Tepid global economic growth expectations from the Organization of Petroleum Exporting Countries sent crude oil prices drifting lower in early Friday trading.
OPEC ministers have been meeting in Vienna this week to review the trajectory in the global energy market. Oil prices are off nearly 60 percent from June 2014 as markets lean more toward the supply side on the back of U.S. shale production.
Ministers in their concluding statement Friday said the sharp decline in crude oil prices, “caused by oversupply and speculation,” has reversed in recent months. Nevertheless, global growth in gross domestic product was expected to increase only modestly for 2016.
“The conference noted that the global economic recovery had stabilized, albeit with growth at moderate levels,” the joint ministerial statement read.
Brent crude oil prices moved lower after the conclusion of OPEC’s meeting, falling a half percent from the previous close to $61.68 per barrel, down more than 5 percent from the start of the week. West Texas Intermediate, the U.S. benchmark, was off about nine tenths of a percent to $57.48 per barrel, down 4.2 percent for the week.
An OPEC decision in November to keep production levels static sent crude oil prices tumbling below $50 per barrel. Ministers said Friday that, with non-OPEC production expected to grow only marginally when compared with 2014, it was keeping its production ceiling unchanged.
The low price of oil is having macroeconomic impacts on indices ranging from government revenues to state-level employment prospects. The International Monetary Fund in its review of the United States said a “sharp contraction in oil sector investments,” could serve as a short-term throttle on economic momentum.