By Amanda Cooper
Oil has gained nearly 12 percent since last Monday, its biggest week-on-week rally since early December 2016.
Brent crude oil was up $1 at $58.06 a barrel by 1500 GMT, having touched a session high of $58.90. U.S. crude was up 88 cents at $48.84 a barrel.
"Momentum is coming back into the market from very depressed price levels," Petromatrix strategist Olivier Jakob said. "We've had five consecutive days of price gains already, so what you have today is a continuation of that."
The oil prices are drawing support from an agreed supply cut by the Organization of the Petroleum Exporting Countries, as well as some non-member countries such as Russia and Oman.
OPEC oil supply fell in December by 460,000 barrels per day (bpd) to 32.68 million bpd, a Reuters survey found last week, led by cuts from top exporter Saudi Arabia.
The aim of the cuts is to rein in a surge in global supply, driven mostly by the United States, where production grew by nearly a fifth to over 11 million bpd in 2018.
"If compliance by OPEC and the allied non-OPEC countries is similarly high as in the agreement two years ago, the oil market is likely to be rebalanced during the first half year," Commerzbank said in a note.
Record high crude oil production has also pushed up U.S. inventories, which rose by nearly 17 percent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday. [EIA/S]
More upbeat equity markets also offered support.
"When stock markets are strong oil usually follows suit," PVM Oil Associates strategist Tamas Varga said.
Shares have risen on expectations that trade talks this week between the United States and China will ease a trade dispute. Disruptions to trade undermine prospects for economic growth and oil demand. [MKTS/GLOB]
Goldman Sachs said in a note it had downgraded its average Brent crude oil forecast for 2019 to $62.50 a barrel from $70 due to "the strongest macro headwinds since 2015".
Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for U.S. light crude by $9 to $57 a barrel.
(Additional reporting by Henning Gloystein in Singapore; Editing by Edmund Blair and Jason Neely)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)