Monetary policy balanced against renewed questions about the supply of crude oil in the second half of the year to add volatility Friday to the price for oil.

Crude oil prices moved erratically in Thursday trading as calls for restraint from Saudi Arabia offset gains in U.S. oil storage and production. There was a brief sigh of relief over the lack of spare capacity, the amount of oil producers could put on the market in short order, though those concerns resurfaced on Friday.

"Even with U.S. record production, the combination of record oil demand, along with declining production from Venezuela and sanctions on Iran, we will be in a supply deficit when we see the end of the year demand increases kick in," Phil Flynn of the PRICES Futures Group in Chicago said in a morning market newsletter.

Oil prices in overnight trading were moving between big gains and minor losses, especially for West Texas Intermediate, the U.S. benchmark for the price of oil.

The price for Brent crude oil was up 1 percent to $73.33 per barrel as of 9:20 a.m. EDT. The price for WTI was up 0.38 percent to $68.50 per barrel. Brent closed Monday at $71.84 per barrel.

The start of earnings season for the second quarter offers a snapshot about future expectations for energy markets. Lower oil prices two years ago left bruises on the financial reports for energy companies, especially those working on the exploration and production side of the sector.

On Friday, oilfield services company Schlumberger, one of the largest companies of its kind in the world, reported second quarter revenue of $8.3 billion, up 6 percent from the first quarter.

"Spare production capacity, which is essentially limited to only a few OPEC countries, is now nearing its lowest level for more than a decade while decline in the world's mature production base continues to accelerate," CEO Paal Kibsgaard said.

The price of oil may be influenced by movements in the value of the U.S. dollar. U.S. President Donald Trump has recently expressed distaste for Federal Reserve policies and those comments could impact the greenback. The strength of the U.S. dollar has an inverse relationship to the price of oil.

Oil prices inch lower amid supply relief
Washington (UPI) Jul 19, 2018 - A shift away from concerns about spare capacity to robust oil supply levels helped push the price of oil lower before the start of U.S. trading Thursday.

Higher crude oil prices caught the attention of U.S. President Donald Trump in early July, prompting a call for more oil from Saudi Arabia. A delicate balance between supply and demand, supported in part by security issues in Libya, shortages from Venezuela, and the potential loss of Iranian oil, meant only a few suppliers had spare capacity to put on the market.

Spare capacity refers to oil a producer could put in play in short order. Saudi Arabia is one of the few producers with any real spare volumes. The Organization of Petroleum Exporting Countries said in its July report that non-OPEC suppliers were contributing to supply growth and on Wednesday, the U.S. government announced domestic production hit 11 million barrels per day for the first time ever.

The U.S. Energy Information Administration added that domestic crude oil inventories increased by nearly 6 million barrel, easing some of the concerns about supply-side concerns.

"The build brings current stocks to around 1.8 percent below the five-year of EIA data, in from over 4 percent below the week prior," James Bambino, the managing editor for the Oilgram Price Report from S&P Global Platts, said in an emailed statement. "This means that not only are crude stocks rising, but they are also lining up more closely to historical norms."

The price for Brent crude oil, the global benchmark, was down 0.63 percent to $72.44 per barrel as of 9:22 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.3 percent to $67.55 per barrel.

Giovanni Staunovo, a commodity analyst for UBS, said the entire commodity sector was taking a hit in early morning trading.

"Probably the strong U.S. dollar is one factor weighing on prices," he said. "Oil prices suffer from a well supplied market, following recovering Libyan production and higher output from Saudi Arabia, its Gulf Cooperation Council allies and Russia among still elevated Iranian crude exports."

GCC member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Just at the open of U.S. trading, several industry contacts told UPI that Riyadh was only keen on preventing an oversupply situation.

Offering some positive support was an outlook on Asian economies from the Asian Development Bank. The ADP said it was expecting growth in gross domestic product for the economies of the Asia-Pacific at 6 percent for 2018 and 5.9 percent for next year, in line with previous forecasts.

"Although rising trade tensions remain a concern for the region, protectionist trade measures implemented so far in 2018 have not significantly dented buoyant trade flows to and from developing Asia," ADB Chief Economist Yasuyuki Sawada said in a statement.

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