Supply-side pressures and broader signs that markets may have overheated earlier this year helped send crude oil prices lower in early Wednesday trading.

Crude oil prices have moved considerably lower for most of February, offsetting a steady run higher for most of January. After settling above $70 per barrel last month, Brent crude oil prices have now given up all their gains and are hitting lows not seen since November.

Enthusiasm about the general health of the global economy, geopolitical risk factors and optimism over an extended agreement from the Organization of Petroleum Exporting Countries to balance a lopsided market overshadowed strong gains in U.S. oil production since late last year.

In its weekly snapshot, the American Petroleum Institute reported late Tuesday that U.S. crude oil inventories swelled by 3.9 million barrels. A survey of analysts from commodity pricing group S&P Global Platts earlier this week revealed expectations of a 3 million barrel increase in U.S. crude oil stockpiles.

Official data from the U.S. Energy Information Administration is due out about an hour after the market opens and will influence the direction for crude oil prices for the rest of the day and into the Thursday session.

Nevertheless, Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI the price for oil is "most certainly" in correction mode. By his read, a U.S. economic policy that bets growth will offset pending deficits is like playing Russian roulette with the world's largest economy.

"All in all, it's enough to trigger a long overdue reduction in bullish bets," he said. "Whether it stops here, or $5 lower, all depends on how strong the need to cut bullish bets will be."

The price for Brent crude oil was down 0.89 percent as of 9:15 a.m. EST to $62.16 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 1.2 percent to $58.48 per barrel

Gasoline inventories in the United States increased as well, signaling demand may be on the decline. On Wednesday, the U.S. Bureau of Labor Statistics released its highly-anticipated consumer-price index, a gauge on the inflation in what people pay for everything from clothes to food. Data show the CPI increased on all consumer items from 0.2 percent in December to 0.5 percent last month.

Consumer gasoline prices on average went from contraction in December of 0.8 percent to an increase of 5.7 percent in January. Year-over-year, all prices increased on average by 2.1 percent.

Recent concerns about surging inflation led to historic losses on major world stock indices. Analysis emailed from UBS on Wednesday said the dip in equities markets is spilling over into commodities.

"Oil prices have fallen to a four-week low, and we believe there is room for more price weakness in the near term," the report read. "The positive sentiment in the oil market, thanks to high OPEC compliance, strong demand growth and lower inventories, is changing, in our view."

Oil prices dragged lower by U.S. production momentum
Washington (UPI) Feb 13, 2018 –

An exuberant report on the pace of U.S. crude oil production growth sent crude oil prices lower to test multi-month lows in early Tuesday trading.

Oil prices staged a comeback on Monday, recovering some ground lost during last week's equities-fueled selloff. In the span of about a week, however, the price of oil lost all of its gains since the start of the year.

Crude oil prices rallied for most of January on mounting economic enthusiasm and geopolitical risk, largely shrugging off record-setting gains in U.S. oil production growth. A monthly market report from the International Energy Agency found that, for the three months ending in November, U.S. production "increased by a colossal 846,000 barrels per day."

Rising U.S. production from shale basins a few years ago prompted the Organization of Petroleum Exporting Countries to defend their market share with even more oil. That tilted the market heavily toward the supply side and OPEC, with support from Russia, is in its second year of trying to bring the market back to balance with coordinated production cuts.

That's supported crude oil prices and stimulated U.S. oil production even further.

"In 2018, fast rising production in non-OPEC countries, led by the United States, is likely to grow by more than demand," the IEA's report read. "For now, the upward momentum that drove the price of Brent crude oil to $70 per barrel has stalled."

The price for Brent crude oil was down 0.7 percent as of 9:20 a.m. EST to $62.16 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.94 percent to $58.73 per barrel.

Brent crude oil was last in this range in the middle of November.

The IEA's report found the overhang in the five-year average in crude oil inventories for the world's leading industrial economies was shrinking to the point of near-balance. A survey of analysts from commodity pricing group S&P Global Platts, however, revealed expectations of a 3 million barrel increase in U.S. crude oil stockpiles.

"Strong U.S. refinery activity this winter has kept crude stocks on pace to close the gap with the five-year average, though overall inventories remain high and domestic production keeps climbing," its emailed market report read.

Speaking to Platts, Russian Energy Minister Alexander Novak stuck to his theme that the balance between global supply and demand mattered more than the price of oil. Novak was among those supporting a second year of OPEC's balancing act, but cautioned about getting ahead of the market.

"My recommendation is to assess the market in the longer term and avoid knee-jerk reactions," he was quoted as saying.