Crude gained on Monday as Qatar faced a deadline on 13 demands by Gulf countries to end alleged support for terrorism and shut Doha-based Al Jazzera, with the emirate expected to reject the calls this week.
The US West Texas Intermediate crude August contract rose 0.41% to $46.23 a barrel On the ICE Futures Exchange in London, Brent oil for September delivery was last quoted at $48.87 a barrel.
Last week, oil prices extended gains into a seventh session on Friday to log their biggest weekly gain since mid-May, as investors were encouraged by fresh signals of a decline in U.S crude production.
Energy services company Baker Hughes reported on Friday that the number of active U.S. rigs drilling for oil declined by two to 756 rigs at the end of last week.
That marked only the second time the weekly oil-rig count fell this year. Oil-rig numbers had climbed for 23 weeks in a row.
The report came after U.S. government data revealed that total domestic crude production fell by 100,000 barrels a day to 9.25 million barrels for the week ended June 23. That was the biggest decline in weekly output since July 2016.
Crude reached bear-market territory late last month amid concern that the ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance the market.
In May, 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.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to gauge the strength of demand in the world’s largest oil consumer.
The reports come out one day later than usual due to the US Independence Day holiday on Tuesday.
Meanwhile, traders will also continue to pay close attention to comments from global oil producers for evidence that they are complying with their agreement to reduce output this year.
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