|Has oil bottom?|
Friday's U.S rig count data has been one of the reason for the market reaction as prices began the week with a rebound in Asian trade. The data points to a drop in the number of oil drilling rigs in operations to a December 2009 low after there have been nine consecutive weeks of cut.
The statement by International Energy Agency, the world's oil consumer body in regards to U.S shale oil production to fall by 600,000 barrels per day this year and another 200,000 barrels per day in 2017 also helped the oil rally.
U.S. crude futures settled up by $1.84, or 6 percent, at $31.48 a barrel, rallying above $32 at one point.
Futures of Brent finished up $1.68, or 5 percent, at $34.69.
HAS OIL BOTTOM?
This is the difficult question because the concern on the glut of supply is still there but what has panned out so far seems to be quite comforting for the oil players. Since last week, the oil prices have seen some slight recovery after the Saudi Arabia-Russia led freeze production on oil's output at January's highs.
The agreement may have only acted as a cushion to the drop in oil prices though as another key member of OPEC, Iraq has said on Monday it planned to raise production to above 7 million bpd over the next five years, and export 6 million bpd of that.
Iran, OPEC's fourth largest producer, has repeatedly pledged to raise its output too to pre-sanctions levels.
Despite Monday's gains, some analysts said market conditions were weak, citing weakening demand for crude.
A Reuters poll forecast that U.S. crude inventories rose 3.2 million barrels last week to record highs above 504 million barrels