Feb. 21 (UPI) -- Crude oil prices were boosted substantially early Tuesday by OPEC comments that a stable price point for oil has yet to be reached.
Oil prices started the week in recovery mode following losses Friday sparked by signs of increased exploration and production activity in North America. Increased U.S. oil production and a strategy of defense for market share by members of the Organization of Petroleum Exporting Countries caused inventory levels to surge and pushed oil prices to historic lows in early 2016. In November, OPEC agreed to limit production and oil markets have since established a floor at around $50 per barrel.
Speaking at an energy summit in London, OPEC Secretary-General Mohammad Barkindo said there was strong coordination around the agreement. Following reports last week suggesting stronger action in the second half of the year, he was quoted by the Financial Times as saying crude oil inventory levels were still too high and markets were not yet at an "equilibrium price."
The price for Brent crude oil was up 2.1 percent about an hour before the start of trading in New York to $56.97 per barrel. West Texas Intermediate, the U.S. benchmark price for crude, was up 1.7 percent to $54.70 per barrel.
OPEC compliance with the agreement is around 90 percent, but the rally in oil prices that followed the agreement has been met with increased production from North America. The latest federal estimates from the U.S. government show gains in output are expected this year, a reversal from late-2016 forecasts.
Regular data on U.S. energy market conditions are delayed this week because of the federal holiday Monday. A daily briefing, however, reported U.S. crude oil production in November marked the second straight month of growth, the first time that happened in more than a year.
Elsewhere, underlying supply-side concerns could be emerging from OPEC members themselves. Though prices aren't yet supportive of exploration, Iran this week said it uncovered a huge deposit of shale oil in the west of the country. Libya, meanwhile, brought in more foreign investors by signing an agreement with Russian oil producer Rosneft.
Libya is exempt from the OPEC agreement. Production in January was 10 percent higher than December and the country set a goal of producing 2.1 million bpd by 2022.