Feb. 17 (UPI) -- A test of the credibility of the Organization of Petroleum Exporting Countries against U.S. shale pushed crude oil prices lower early Friday.
Oil moved in volatile territory Thursday. Early morning reports that OPEC might extend or enhance a six-month production deal aimed at market stability into the second half of the year sent oil slightly higher, but ongoing pressures from steady gains in North American production offset the rally.
Crude oil prices were moving lower in the hour before the start of trading in New York. Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in an emailed report markets may be turning sour on OPEC sentiment that would usually spark a major rally.
"We do not consider that a cut extension in the second half is a done deal," he wrote. "Pushing maintenance forward has helped OPEC achieve strong compliance in the first quarter. Maintaining the same compliance when maintenance is over and if Libya and Nigeria improve their production will be tougher."
The price for Brent crude oil was down 0.6 percent from the previous close to trade at $55.31 per barrel about a half hour before the start of U.S. trading. Light, sweet crude -- West Texas Intermediate -- was down 0.5 percent to $53.09 per barrel.
Oil trading in a narrow band around $55 per barrel has brought energy companies back to North America, where some operations were sidelined by last year's market downturn. Federal U.S. forecasts for total oil production this year reversed course to show gains and most of the early recovery is seen offshore, indicating shale oil isn't showing up yet in the rebound.
Market movement Thursday was influenced to a degree by a report of slight gains in the number of people in the United States, the world's leading economy, filing first-time claims for unemployment.
Oil prices in particular may be influenced later in the day when Baker Hughes publishes weekly figures for rig counts. Rig numbers serve as a loose gauge for exploration and production activity and any gains, especially in North America, could add to growing supply-side concerns.