Feb. 27 (UPI) -- Investors on Monday focused more on OPEC possibilities than real-time trends elsewhere to send crude oil prices sharply higher in early trading.
Crude oil prices moved lower Friday after reports from the United States showed dramatic increases in oil exports and a move back above 9 million barrels per day in total production. Shale oil production is costly, but has proven more resilient to lower crude oil prices than expected.
Stephen Brennock, an analyst with broker PVM, said in an emailed note early Monday that traders were focused on reports that Iraq and the United Arab Emirates have strengthened their support for an agreement by the Organization of Petroleum Exporting Countries to limit total production.
Last week, OPEC's secretary-general said compliance was strong so far and word of tighter policies from Iraq, one of the group's leading producers, sent crude oil prices higher in early Monday trading.
The price for Brent crude oil was up 1.1 percent about a half hour before the start of trading in New York to $56.60 per barrel. West Texas Intermediate, the U.S. standard for crude oil prices, was up 0.9 percent to $54.46 per barrel.
Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in an emailed note that OPEC compliance with the terms of the production agreement are "blowing away expectations" so far.
Russia is a party to the OPEC agreement, though its efforts to curb production have been more gradual than other producers. Speaking to Bloomberg News early Monday, Gait al-Jebouri, a vice president at Russian oil company Lukoil, said it was the United States that was putting pressure on crude oil prices with its resilience.
Any future gains in U.S. oil production, he said, would act as "a lid" on how high crude oil prices could go. By his estimate, crude oil prices likely won't top $65 per barrel any time soon.
Crude oil prices have been volatile day-to-day, but trading in a narrow band around $55 per barrel for most of the year.