Jan. 8 (UPI) -- Crude oil prices started Monday in positive territory, continuing from last week's rally as shale producers in the United States showed a bit of a pullback.
The bulls were running out of the gates to start 2018, prodded by political unrest in Iran, one of the leading producers in the Organization of Petroleum Exporting Countries. While production hasn't been impacted by protests, it will be if U.S. President Donald Trump decides later this week to not issue a sanctions waiver for Iran under the terms of a U.N.-backed deal he's vowed to unravel.
Last week saw severe weather across much of the eastern half of the United States, with snow falling on parts of Florida for the first time in years. The severe cold that's lingered for a few weeks may help explain a dip in exploration and production activity. Reported as rig counts, drilling service company Baker Hughes saw activity in the shale-rich United States drop as the rest of the world, Canada included, saw an uptick.
Investment confidence in a new U.S. tax code, meanwhile, spilled deep into markets in general, with the S&P 500 and Dow Jones Industrial Average charting new positive territory.
"The feel-good factor across stock markets trickled through into the energy sphere," Stephen Brennock, an analyst at London oil broker PVM, said in a report emailed to UPI.
The price for Brent crude oil inched barely into positive territory early Friday, up just 0.07 percent to $67.67 per barrel at 9:08 a.m. EST. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.23 percent to $61.58 per barrel.
The spread, or difference, between Brent and WTI was supporting U.S. crude oil exports as the gap widened. The spread, however, has been narrowing so far this year and could lead to tighter markets if data show less U.S. oil on the global market.
The price for crude oil is up almost 2 percent so far this year. With U.S. shale still resilient, and questions over the duration of the geopolitical risk premium, Vandana Hari, a market analyst and founder of Vanda Insights, said in a weekend report emailed to UPI that "a correction now appears overdue."
Brennock, meanwhile, added there's a general sense that total U.S. crude oil production will reach record-setting territory. As much as 10 million barrels per day on average is expected from the United States this year, which could unsettle the OPEC effort to balance the market with production cuts.
"It is clear to see that the U.S. shale patch has a number of chinks in its armor," he said. "Nevertheless, it takes a brave man to bet against the U.S. shale engine -- it has surprised to the upside in the past and will continue to do so in 2018."