NEW YORK, Jan. 10 (UPI) -- Crude oil prices notched only modest gains before trading opened in New York, even as Russia said it was trimming oil output as obligated under an OPEC deal.
Crude oil prices lost major ground in Monday trading following a report on December exploration and production activity from oilfield services company Baker Hughes. The December rig count, which serves as an indicator of the appetite to spend on exploration and production, showed dramatic increases in North America.
Oil prices have reached a point where some companies are coming off the U.S. shale oil sidelines to resume work. Operations were curbed in early 2016 after crude oil prices dropped below $30 per barrel.
"The continuous rise in U.S. rig counts is bound to have a positive impact on domestic oil production," Tamas Varga, an analyst at broker PVM, said in a note published early Tuesday.
Crude oil prices have stayed above $50 per barrel more or less since members of the Organization of Petroleum Exporting Countries agreed in November to limit output. Russia, which contributes most of the cuts from non-OPEC members, said it was meeting its obligations.
Brent crude oil prices about an hour before the start of trading in New York were up a modest 0.3 percent to $55.10 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, in the February contract was up 0.25 percent to $52.09 per barrel.
Supply-side strains pulled down oil prices last year and additional U.S. pressure may come with the sale of around 8 million barrels from the Strategic Petroleum Reserve in the coming months. That's about a half-day's worth of U.S. demand and any impact on crude oil prices would be short-lived.
Crude oil prices started 2017 at an 18-month high, but have since failed to sustain that rally. The morning movement for crude oil prices may be subdued as investors await the next short-term market report from the U.S. Energy Information Administration, which comes out later Tuesday.
The last EIA report found U.S. shale oil was more resilient to lower crude oil prices than initially expected. Last month, EIA said it expected total U.S. crude oil production for 2017 would by about 200,000 bpd less than last year, a drop not as severe as previous estimates.