The price of oil has increased above $59 a barrel due to slowdown in US drilling.

Brent crude futures grew $1.40 at $59.28 a barrel and US crude had seen a rise of $1.22 to $52.86 a barrel.

Newedge commodity sales manager Ken Hasegawa was quoted as saying by Reuters: "Recently there is no direction. If the market rises a lot then a lot of short covers come into the market. It’s the same when prices fall."

Many financial traders believe that prices of the crude may not dip any further.

" Global oil fundamentals have been quite strong year-to-date, but we now see signs that physical markets are weakening."

ANZ was quoted by the news agency as saying: "Although there are tentative signs of demand improving and rig counts fell to the lowest level since 2010, an ongoing global market surplus, driven by swelling US inventories and Saudi Arabian output to record high levels, should limit any potential rally."

However, others such as Morgan Stanley are taking a more cautious approach.

Morgan Stanley noted: "Global oil fundamentals have been quite strong YTD (year-to-date), but we now see signs that physical markets are weakening. Global refining margins, while still healthy, have fallen materially, Morgan Stanley noted.

"With US runs set to ramp over the coming weeks, global turnarounds rising and product demand weakening seasonally, we expect product builds and pressure on global refining margins, which should diminish the appetite for non US crudes."

The bank noted that drop in production from Libya, Saudi Arabia and Russia as well as falling demand for West African crude meant weak market fundamentals.