Crude prices held gains in Asia Monday after supporting comments by the Russian and Saudi energy ministers at the weekend from Kazakhstan and as datasets this week may provide support for views that the supply and demand are slowly, but surely heading for balance.
The U.S. West Texas Intermediate crude July contract rose 0.55% to $46.08 a barrel. On the ICE Futures Exchange in London, Brent oil for August delivery gained 0.56% to $48.42 a barrel.
Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global supply and demand levels.
Last week, oil futures settled a bit higher on Friday, but prices still suffered their third straight weekly loss as the market weighed rising U.S. drilling and swelling stockpiles against efforts by major producers to cut output to reduce a global glut.
Data from energy services company Baker Hughes (BHI) showed on Friday that U.S. drillers last week added rigs for the 21st week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.
The U.S. rig count rose by 8 to 741, extending a year-long drilling recovery to the highest level since April 2015. That came after data on Wednesday showed that U.S. crude stockpiles unexpectedly climbed for the first time in nine weeks.
The increase in U.S. drilling activity and shale production has mostly offset efforts by OPEC and other producers to cut output in a move to prop up the market.
Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.
So far, the production cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, and a relentless increase in U.S. shale oil output.