Oil prices climbed about 3 percent on Monday, rebounding further from 1-1/2-year lows reached in December on support from OPEC production cuts and steadying equities markets. Data showed that stockpiles at Cushing, Oklahoma, a key delivery hub for US crude futures, decreased by 565,000 barrels from December 3 to December 4, according to Genscape, a USA global commodity and energy markets intelligence firm.
Oil futures have gained about 10 percent since last Monday.
"Momentum is coming back into the market from very depressed price levels", Petromatrix strategist Olivier Jakob said.
Looking at oil supplies, 2019 crude prices have been supported by supply cuts from a group of producers around the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member Russian Federation.
The aim of the production cut is to rein in a surge in global supply, driven mostly by the United States, where production grew by almost a fifth to over 11 million bpd in 2018. Meanwhile, U.S. crude inventories probably declined last week, easing worries about a glut.
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Data released by the Energy Information Administration on Friday showed crude inventories in the USA rose by 7,000 barrels in the week to December 28, beating expectations for a drop of more than 3 million barrels. The producers had made a decision to boost production in May to moderate rallying oil prices amid pressures from the USA to push them lower ahead of midterms.
US crude inventories at Cushing, Oklahoma, the delivery point for USA crude futures, fell by 565,000 barrels from last Tuesday to Friday, traders said, citing data from market intelligence firm Genscape.
Saudi-based Arab Petroleum Investments Corp (APICORP), a firm specialising in funding petroleum projects, estimated in a report on Tuesday that oil prices are likely to trade at $60 to $70 per barrel by mid-2019.
"Surely, there will be more twists and turns in the saga and increasing US tariffs on Chinese goods after March from 10 percent to 25 percent can not be excluded", Tamas Varga of PVM Oil Associates said.
The escalating trade dispute between Washington and Beijing had hit prices in recent months because of fears that it could dampen global economic growth and result in a slowdown in oil demand. The ongoing spat has weighed on global growth, pushing oil sharply lower in the last few months.
"Spot prices will continue to recover with Brent backwardation set to return by summer as inventories eventually revert to 5-year average levels".