Investing.com - Oil prices were higher during European morning hours on Monday, rising back toward an eight-week high on increasing confidence that OPEC’s supply curbs will outweigh a gain in U.S. stockpiles.
The U.S. West Texas Intermediate crude April contract rose 42 cents, or around 0.8%, to $54.41 a barrel by 4:10AM ET (09:10GMT). The U.S. benchmark reached $55.03 last Tuesday, a level not seen since January 3.
Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London added 55 cents, or about 1%, to $56.86 a barrel. The global benchmark touched $57.31 last week, just shy of its highest level of the year.
Hedge funds extended their bullish bets on oil to an all-time high last week as OPEC and non-OPEC countries made a strong start to lowering their oil output by almost 1.8 million barrels per day by the end of June, with compliance currently at around 90%.
OPEC could extend its oil supply-reduction pact with non-members or even apply deeper cuts from July if global crude inventories fail to drop to a targeted level, OPEC sources said earlier this month.
Concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand limited gains.
Data from oilfield services provider Baker Hughes on Friday revealed that the number of active U.S. rigs drilling for oil rose by five last week, the sixth weekly increase in a row. That brought the total count to 602, the most since October 2015.
Meanwhile, the U.S. Energy Information Administration said on Thursday that crude supplies rose by 564,000 barrels last week to yet another all-time high, feeding concerns about a global glut.
Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Meanwhile, traders will also continue to pay close attention to comments from global oil producers for further evidence that they are complying with their agreement to reduce output this year.
Elsewhere on Nymex, gasoline futures for April rose 1.9 cents, or around 1.1%, to $1.755 a gallon, while March heating oil jumped 1.5 cents, or 1%, to $1.663 a gallon.
Natural gas futures for April delivery sank 10.6 cents, or almost 4%, to $2.681 per million British thermal units.