Oil Markets Stagnant as U.S. GDP Disappoints
NEW YORK, April 29 (UPI) — Crude oil prices moved up modestly in early Wednesday trading despite weak demand and gross domestic product reports from the United States.
The price for West Texas Intermediate, the U.S. benchmark, inched slightly higher from the previous session to trade at $57.19 for the June contract. WTI prices have been relatively flat for much of the week, though Wednesday’s price was off about a half percent from Monday.
Commitments from Saudi Arabia that the Chinese economy would not run short on oil drove prices into negative territory in trading early this week. Crude oil prices have rallied from January lows, but remain depressed as weak economic momentum drags on demand potential.
The U.S. Commerce Department said it made an initial estimate that real gross domestic product increased at an annual rate of 0.2 percent in the first quarter of 2015, compared with 2.2 percent during fourth quarter 2014.
In terms of demand for energy products, the U.S. Energy Information Administration said in a briefing there was “near-zero growth” for the domestic economy, noting consumption has slowed and is not expected to rebound to break through the 1 percent rate through 2040.
“Energy used in homes is essentially flat, and transportation consumption will decline slightly, meaning that energy consumption growth will be concentrated in U.S. businesses and industries,” it said.
The Organization of Petroleum Exporting Countries in its latest monthly market report said about 60 percent of the oil demand growth this year would come from Asian economieslike China.
The price for Brent, the global benchmark, was up about a half percent in early Wednesday trading to $64.94 per barrel. Brent is down about 6 tenths of a percent for the week.
