Oil rallied for a seventh day as USA negotiators touted progress in trade talks with China and investors gained faith that OPEC will shrink output. On Friday, crude oil futures ended up $0.87, or 1.9%, at $47.96 a barrel, extending gains to a fifth successive session.
U.S. Commerce Secretary Wilbur Ross said on Monday that there was a "very good chance" of reaching a settlement, while China's Foreign Ministry said Beijing had the "good faith" to resolve trade friction with the United States.
Brent crude futures gained 69 cents, or 1.22 percent, to $58.02 per barrel by 1325 GMT.
Crude is seeing a tentative recovery after fears of oversupply and weakening global growth drove prices to their worst annual slump since 2015. President Xi Jinping dispatched one of his top aides to negotiations in Beijing, while his counterpart Donald Trump has given U.S. Trade Representative Robert Lighthizer until March 1 to negotiate an accord.
With drilling activity still high, most analysts expect U.S. oil production to rise further this year.
The price of Brent crude has increased 7.5 per cent since the beginning of the year following a massive drop in prices in the last three months of 2018.More news: United States airstrike in Yemen kills al-Qaeda operative behind USS Cole bombing
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Beyond politics, oil markets are being supported by supply cuts started late previous year by a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member Russian Federation. "They can be very convincing when they choose to be".
Once again, the Organization of the Petroleum Exporting Countries' (OPEC) newly-implemented output cuts were credited for crude prices rising yet again on Monday: Brent rose 27 cents to settle at $57.33 per barrel, while West Texas Intermediate rose 56 cents to settle at $48.52 per barrel.
The crude prices have declined by 40% after declaring the 4 year high, which was over $76 per barrel.
Apicorp noted that the cuts to production undertaken by Opec and allies may not be sufficient to balance the market, which may see build up of inventory levels, particularly as United States shale is expected to top 12 million bpd during the second half of the year. The current round of talks are scheduled to continue through Tuesday, with more senior-level discussions likely this month.
American crude stockpiles probably declined by 2.7 million barrels last week, according to the median estimate in a Bloomberg survey of analysts ahead of government data on Wednesday. U.S. inventories are near their lowest level in nearly two months. Record high crude oil production C-OUT-T-EIA has pushed up US inventories.