Oil prices move lower after testing new water

Crude oil prices moved lower early Wednesday after running into a wall in the midst of the euphoria surrounding OPEC's latest rhetoric.

Crude oil prices moved sharply higher in Tuesday trading after the secretary-general of the Organization of Petroleum Exporting Countries boasted of the strong support from an agreement to limit total production to 32.5 million barrels per day.

"There was nothing new in the OPEC headlines but they always get some support by default, but a support that still fails to get follow-through buying," Olivier Jakob, managing director of Switzerland-based consultant Petromatrix, said in an emailed report. "This was again the case yesterday."

The price for Brent crude oil was down 0.72 percent from the previous close to $56.25 per barrel about a half hour before the start of trading in New York. Light, sweet U.S. crude oil -- West Texas Intermediate -- was 0.67 percent lower to $53.96 per barrel.

Jakob said trading yesterday moved in fits and starts as Brent made a run for $58 per barrel, but pulled back on confirmation of a sale of 10 million barrels from the U.S. Strategic Petroleum Reserve.

On the balance between supply and demand, crude oil prices have been holding steady above $50 per barrel since OPEC's production deal was brokered in November. The floor price means basins like U.S. shale that were sidelined during last year's downturn are returning to life.

"A rebound in U.S. shale production could also replace barrels missing from OPEC suppliers," S&P Global Platts Oil Futures Editor Geoffrey Craig said in emailed commentary. "After a two-year downturn, shale-watchers have expressed astonishment at the pace of activity just a handful of weeks into 2017."

Whiting Petroleum, a U.S. company focused almost entirely on shale oil, said it planned to spend more than $1 billion this year on its assets in Colorado and North Dakota.

Federal U.S. data on supply and demand are delayed to Thursday because of Monday's federal holiday.