Industry signs that weak economics may be throttling some developments in the U.S. energy sector lifted crude oil prices in early Monday trading.

Brent crude oil prices gained nearly 2 percent from the previous close to trade at $48.52 per barrel in early Monday trading. West Texas Intermediate, the U.S. benchmark for crude oil prices, gained around 2.7 percent to $45.75 per barrel.

Crude oil prices are still down more than 50 percent from last year. Lingering concerns over the strength of the European economy and emerging signs of a slowdown in Asia means demand is weak in an era where U.S. oil production is in part keeping markets weighted heavily on the supply side.

Data from the United States show the low price of crude oil is having a durable impact on the exploration and production side of the energy sector. For the third week in a row, oil services company Baker Hughes reported a decline in the number of rigs operating in the United States. Total rig activity is down by more than 1,000 year-on-year.

A weekend report from analytical firm Wood Mackenzie, meanwhile, said the U.S. oil sector could face further challenges as several major projects are deferred until markets improve.

Monday's rally, however, may be short lived. Despite the slump in rig activity, U.S. drillers are figuring out ways to do more with less. Data last week from the American Petroleum Institute show U.S. crude oil production in August is at its highest level since 1972. The August average of 9.3 million barrels of oil per day is 5.4 percent above last year.

Separate reports from the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries show U.S. oil production starts to decline by 2016.

On the demand side, the Organization of Economic Cooperation and Development said last week global economic growth was sub-par.

Rig numbers not a strong production indicator
Denver (UPI) Sep 18, 2015 - Even if rig numbers across U.S. shale oil basins hold steady, current economics means production could start to decline, a forecasting unit of Platts reported.

Low crude oil prices, down about 50 percent year-on-year, means energy companies have less capital to invest in exploration and production.

In Texas, the No. 1 oil producer in the nation, the state energy regulator said the 864 drilling permits awarded in August was 64 percent lower year-on-year. The rig count in North Dakota, the No. 2 oil producer, of 67 is 66 percent lower than this date in 2014.

Sami Yahya, an analyst with Bentek, the forecasting unit for Platts, said energy companies are figuring out ways to save money by either drilling en masse are through deferments.

"While the U.S. is able to drill more wells now with fewer rigs, some producers are opting to defer completing their wells until better economic conditions are present," he said in an emailed report. "In other words, production could begin to decline even if rig activity and number of drilled wells remain steady. This is a crucial risk to current production numbers."

In the Eagle Ford shale basin in Texas, one of the state's most lucrative fields, Bentek finds oil production increasing by about 1 percent on average each month. North Dakota reported a recent decline in oil production, though the 6,000 barrel per day drop from July to August is less than 1 percent of overall output.

In its latest short-term market report, however, the U.S. Energy Information Administration said total crude oil production will decline 4.3 percent from expected full-year 2015 levels to 8.8 million barrels per day by 2016.