NEW YORK, Aug. 5 (UPI) — Continued improvement in the U.S. labor market and industry investment commitments pushed crude oil prices toward positive territory in early Wednesday trading.
West Texas Intermediate, the U.S. benchmark, gained eight-tenths of a percent by the opening bell to trade at $46.13 per barrel. Brent crude oil prices rallied a full percentage point to $50.52 per barrel for a second straight day of gains.
Crude oil prices are trading well below June 2014 levels as supply far outweighs demand. The American Petroleum Institute published data Tuesday showing U.S. crude oil and gasoline inventories declined last week in a sign demand was growing in the U.S. market.
Payroll processor ADP said private sector employment in July increased by 185,000 from the previous month. Mark Zandi, chief economist of Moody’s Analytics, said in a statement that overall job growth has moderated so far this year.
“Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown,” he said. “Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment.”
The U.S. Commerce Department last week said gross domestic product grew at 2.3 percent annually on the back of increased consumer spending, which offset weakness in spending from businesses. First quarter GDP was revised to show 0.6 percent growth after previous reports showed a 0.2 percent downturn.
Crude oil prices are coming off their worst July in years and Wednesday’s prices are still more than 50 percent below mid-2014 levels. The slump has forced several companies to trim spending and cut staffing levels.
This week, U.S. shale company Pioneer Natural Resources said it planned more work in its Texas assets while BP said Wednesday it was investing heavily in the North Sea.