Oil sharply higher on OPEC compliance

Feb. 10 (UPI) -- Crude oil prices moved sharply higher in early Friday trading after a report from the IEA found an OPEC effort to balance the market was starting to work.

Crude oil prices moved sharply lower to start the week after a steady string of reports found the market recovery that emerged late last year was leading to growth in the North American energy sector. A rally surfaced midweek on signs of market balance.

A report Friday from the International Energy Agency found most of the growth in crude oil production from countries outside the Organization of Petroleum Exporting Countries was coming from North America and Brazil. Nevertheless, OPEC was more or less in compliance with an agreement to trim production in an effort to balance the markets.

OPEC seems to be moving in line with the six-month agreement since implementation began in January.

"This first cut is certainly one of the deepest in the history of OPEC output cut initiatives," the IEA reported.

The price for Brent crude oil was higher than the close of trading Thursday by 1.8 percent to $56.64 per barrel about a half hour before the start of trading in New York. West Texas Intermediate, the U.S. benchmark price for crude oil, was up 1.7 percent to $53.89 per barrel.

The IEA cautioned, however, that markets were still in "a wait-and-see mode" as crude oil inventories are flirting with record highs despite steady declines over the last few months.

Brent crude oil prices closed Monday at $55.02 per barrel.

Broader markets may be breathing a sigh of relief on the geopolitical front after U.S. President Donald Trump embraced the so-called "One China" policy and thereby calmed recent tensions in the Asia-Pacific. The Trump administration has so far rattled investor nerves over a series of stances on issues related to China, trade agreements and Iran.

Analysts at broker PVM, meanwhile, continued to express pessimism about the economic policies from the Trump administration. Stephen Brennock said in an emailed report that an adjustment on border taxes could backfire for a U.S. economy looking for more support from the energy sector under Trump if U.S. trading partners "respond to Washington's protectionist policies with their own tit-for-tat levies."