Crude oil prices drifting sharply before trading opens in New York as signs of a North American rebound emerge. File photo by Monika Graff/UPI |
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NEW YORK, Jan. 9 (UPI) -- Crude oil prices moved sharply lower before the start of trading in New York as signs emerged of a strong North American energy sector recovery.
Crude oil prices entered 2017 at 18-month highs, but faltered in sessions that followed because of uncertain direction in the broader energy market. Prices moved lower Friday, meanwhile, as economists parsed through U.S. labor figures, with an analyst at the Federal Reserve Bank of Dallas describing the nation's economy as moving in a "fragile state."
Crude oil prices have remained more or less above $50 per barrel since the Organization of Petroleum Exporting Countries agreed in November to limit output to bring markets back to a healthy level of supply and demand. The rise in crude oil prices, however, has brought energy companies back to work in the more expensive Canadian and U.S. oil reservoirs.
Oilfield services company Baker Hughes reported a total Canadian rig count for December at 209, an increase of 20 percent from the previous month. The total U.S. rig count was up just over 9 percent to 634, an increase of 54 rigs from November.
A rise in North American production helped push the market toward the supply side and cut crude oil prices by more than half from 2014 to early 2016. The price for Brent crude oil was down 2 percent about an hour before the markets opened in New York to $55.95 per barrel. The front-month price for U.S. oil, West Texas Intermediate, was down from Friday's close by 2 percent to $52.92 per barrel.
Last week, the American Petroleum Institute said it continued to see pressure on the nation's energy sector, a sentiment confirmed a Oklahoma State Treasury that reported declines in some of the tax receipts from oil and gas production.
The API said the total number of wells drilled and completed during the fourth quarter was down 8.8 percent compared to the previous quarter. That decline was less severe, however, than the 21 percent decline reported during the same period in 2015.
"Even with the decline, our nation has established itself as the world leader in the production and refining of oil and natural gas," Hazem Arafa, the head of API's statistics department, said.
