Oil prices collapse amid OPEC positioning

NEW YORK, Oct. 24 (UPI) -- The latest chatter over production moves from members of OPEC overshadowed small improvements in the European economy to send oil prices crashing early Monday.

The weekend saw rhetoric focusing again on the contributions from major producers like Russia that sit outside the Organization of Petroleum Exporting Countries. OPEC members at a meeting last month in Algeria said they'd work toward an agreement to stabilize or cut production levels to bring energy markets back into balance, though some members said cooperation from non-members was needed to make any formal arrangement stick.

Oil moved sharply lower in early Monday trading after Iraq, one of the main OPEC producers, said it wanted to be excluded from the production arrangement, saying oil revenue was needed for the continued fight against the Islamic State terror group.

Iraq's 4.4 million barrels of oil produced per day last month accounted for about 10 percent of OPEC's total output. Total OPEC production is already near the high end of the level outlined in Algeria and further exemptions would make the agreement difficult to uphold.

The price for Brent crude oil was down 1 percent from Friday's close to start the trading day at $51.26 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, fell 1.3 percent to open the day at $50.16 per barrel.

Speaking from Vienna during a high-level meeting with Russian officials, OPEC Secretary-General Mohammad Sanusi Barkindo said market stability was a mutual interest for producer states.

"While there are signs that the rebalancing of the fundamentals is underway, with overall non-OPEC supply contracting this year and demand at healthy levels, the large stock overhang continues to be a major concern," he said in his prepared remarks.

A high level of oil production, largely from shale basins in the United States, helped pushed the market toward the supply side two years ago.

On the economic front, the 19 countries that use the euro reported government deficits, when compared with gross domestic product, improved slightly from the first quarter. European Central Bank President Mario Draghi said last week the regional economy was resilient, but subject to downside risks.