With oil futures having gained over 7 percent since last Monday, Jim Ritterbusch, president of Ritterbusch and Associates, said in a note that, "We continue to view the OPEC production cuts that became official last week as a legitimate bullish consideration and we still look for the reduction to translate to a reduced USA crude surplus that could potentially be erased in some 8-9 weeks".
Brent crude futures (LCOc1) rose $1.39 a barrel, or 2.4 percent, to $58.72.
"Momentum is coming back into the market from very depressed price levels", Petromatrix strategist Olivier Jakob said.
The oil prices are drawing support from an agreed supply cut by OPEC, as well as some non-member countries such as Russian Federation and Oman.
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 U.S. shale is expected to top 12 million bpd during the second half of the year. Meanwhile, U.S. crude inventories probably declined last week, easing worries about a glut.
Record high crude oil production has also pushed up US inventories, which rose by almost 17 percent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday.
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"The oil market continues to rally as the OPEC and non-OPEC production cuts are taking effect, reducing the oversupply situation that we've been seeing in the market", said Andrew Lipow, president of Lipow Oil Associates in Houston.
Supporting Ritterbusch's observations was news from Genscape that US crude inventories at Cushing, Oklahoma fell by 565,000 barrels from last Tuesday to Friday.
The World Bank's January 2019 World Economic Outlook is titled "Global Economic Prospects".
The coalition of 25 OPEC and non-OPEC states, which came together for the first time in late 2016 to slash global oil supplies in order to reverse a three-year oil price slide, agreed last month to once again cut their collective output by 1.2 mmbbl a day in 2019 which should be sufficient to keep oil prices above US$60 a barrel this year, according to 74 per cent of those surveyed in the GIQ survey.
S&P Global Ratings said it had lowered its average oil price forecasts for 2019 by $10 per barrel to $55 for Brent and $50 per barrel for WTI.
Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for USA light crude by $9 to $57 a barrel.