NEW YORK, Sept. 21 (UPI) -- Industry signs that weak economics may be throttling some developments in the U.S. energy sector lifted crude oil prices in early Monday trading.
Brent crude oil prices gained nearly 2 percent from the previous close to trade at $48.52 per barrel in early Monday trading. West Texas Intermediate, the U.S. benchmark for crude oil prices, gained around 2.7 percent to $45.75 per barrel.
Crude oil prices are still down more than 50 percent from last year. Lingering concerns over the strength of the European economy and emerging signs of a slowdown in Asia means demand is weak in an era where U.S. oil production is in part keeping markets weighted heavily on the supply side.
Data from the United States show the low price of crude oil is having a durable impact on the exploration and production side of the energy sector. For the third week in a row, oil services company Baker Hughes reported a decline in the number of rigs operating in the United States. Total rig activity is down by more than 1,000 year-on-year.
A weekend report from analytical firm Wood Mackenzie, meanwhile, said the U.S. oil sector could face further challenges as several major projects are deferred until markets improve.
Monday's rally, however, may be short lived. Despite the slump in rig activity, U.S. drillers are figuring out ways to do more with less. Data last week from the American Petroleum Institute show U.S. crude oil production in August is at its highest level since 1972. The August average of 9.3 million barrels of oil per day is 5.4 percent above last year.
Separate reports from the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries show U.S. oil production starts to decline by 2016.
On the demand side, the Organization of Economic Cooperation and Development said last week global economic growth was sub-par.
