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Weak British economic growth wasn't enough to offset short-term pipeline issues in North America or OPEC rumors that lifted oil prices higher on Wednesday.
The British Office for Budget Responsibility said the economy slowed this year as higher inflation put a lid on personal incomes and spending. As a result, and in combination with headwinds from the British exit from the European Union, the budget office said it lowered its forecast for gross domestic product for the foreseeable future.
"We now expect growth to average 1.4 per cent a year over the next five years, slowing a little over the next two [years]," its report read.
The low growth forecast coincided with U.S. reports of slow momentum in hiring. The U.S. Labor Department said first-time claims for unemployment for the week ending Nov. 18 was lower than the previous week by 13,000, though the previous week's figures were revised higher by 3,000. The less-volatile four-week moving average was also revised up by 1,250.
Both figures would normally send crude oil prices lower, though traders have focused most of their attention in recent sessions to a Nov. 30 meeting of ministers from the Organization of Petroleum Exporting Countries.
Ole Hanson, the head of commodity strategy at Saxo Bank, said in a presentation emailed to UPI that oil prices are supported by the OPEC move, which is supported by Russia, strong demand and geopolitical issues.
The price for Brent crude oil was up 0.9 percent in the minutes before trading opened in New York to $63.13 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.7 percent to $57.81 per barrel.
North American crude oil prices are supported by TransCanada's decision to close down the Keystone oil pipeline following a leak last week in South Dakota. Western Canadian Select, the Canadian benchmark, was up 2.3 percent to $42.19 per barrel as much of the Keystone oil remains locked in Alberta.
Hanson cautioned, however, that OPEC's efforts may be undermined by "robust" growth from U.S. shale basins, where production gains are expected so long as WTI stays above $50 per barrel. On the OPEC decision to extend the agreement deep into 2018, he said the group was now in a tough position.
"OPEC is in the same situation as central banks," he said. "Finding the exit without disturbing the market will be very hard to achieve."
By his read, there is no room at all for production gains next year.
The price of oil will move later in the trading day when the U.S. Energy Information Administration releases weekly data on oil and gasoline inventories. Builds may throttle the rally, though the focus Wednesday is squarely on OPEC.
U.S. markets are closed Thursday for the Thanksgiving Day holiday.
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