Aug. 21 (UPI) -- Following Friday's big rally, crude oil prices turned somewhat lower early Monday as oil officials met in Vienna to discuss the impact of a balancing act.
After a slow start, crude oil prices jumped more than 3 percent Friday after drilling services company Baker Hughes reported a slight dip in exploration and production activity in the United States. Reported as rig counts, the drop off sparked a rally after previous sessions were weakened by reports of higher U.S. crude oil production potential.
Because of lag times and other metrics, rig counts in and of themselves don't indicate future production trends, though the downturn could be a sign of a slowdown in U.S. onshore activity as crude oil prices linger in a narrow trading band.
Representatives from the Organization of Petroleum Exporting Countries met with non-member state officials in Vienna to review the status of a multilateral deal to bring crude oil supplies down closer to a five-year average.
Past technical meetings have brought few formal results. Oil ministers won't attend, but the meeting itself has market implications because of the critical and supporting voices at play. Oil stocks are moving closer to a level that would indicate balance, though some OPEC members are still producing more oil, while U.S. shale oil players have proven more resilient to lower crude oil prices than expected.
During the weekend, Libya again reported a loss of output because of problems at its Zawiya oil terminal. Libya is exempt from the OPEC arrangement because of national security issues, and fits and starts from the North African producer can have a big impact on the crude oil market.
Analysts last week said the future ahead for crude oil prices looked bearish because the coming end of summer usually translates to weak demand. Phil Flynn, senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter he expected the opposite.
"The U.S. oil count fell by 5 oil rigs according to Baker Hughes, confirming talk of a slowdown by many in the oil service space," he said. "With a supply disruption in Libya and OPEC saying that they will see better compliance, the market will soon emerge out of its bearish darkness."
Meanwhile, a cluster of storms in the Atlantic could evolve later in the week and impact operations near the southern coast of Texas.