Balance brings the bulls back to crude oil Monday

Feb. 20 (UPI) -- A prevailing sentiment that at least some level of short-term market balance is entrenched helped give oil prices a lift early Monday.

Crude oil prices slipped Friday, ending a volatile week on a down note. Prices slipped to end the week after oilfield services company Baker Hughes reported another week of gains in its rig count index.

Rig counts serve as a loose metric to gauge how ready market players are to invest in exploration and production. Market watchers are looking at North American gains in particular as U.S. shale oil production helped push inventory levels over the brim in recent years.

Tamas Varga, an analyst for broker PVM, said in an emailed note that even with U.S. shale oil making a comeback there were competing trends creating a level of market balance.

"There is still a general consensus that the OPEC/non-OPEC agreement helps supply to get in line with demand," his note read. "This bullish stance is countered by the ever increasing inventories in the U.S. and rising rig counts."

The agreement refers to deal for managed declines. The Organization of Petroleum Exporting Countries coordinated the arrangement late last year in an effort to erase the oversupply and compliance so far is around 90 percent.

The price for Brent crude oil was up 1 percent from Friday's losses to $56.23 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, was up 0.66 percent to $53.71 per barrel.

Oil pricing group S&P Global Platts said Monday it may reconfigure the blend of crudes that make up the Brent benchmark to reflect changing production environments in the North Sea. Output from the Troll field in the Norwegian waters of the North Sea would be included in January 2018.

Oil prices may be skewed somewhat on Monday because of the bank holiday in the United States.

Elsewhere, market data finds Saudi Arabia continues to draw down its market contribution by almost a quarter-million barrels per day from November. The largest producer in OPEC, Saudi Arabia is also the largest contributor to the managed decline agreement.