Oil prices have risen following a fall in US crude inventories, yet concerns remain about the global oversupply.
Brent futures edged up 43 cents $40.54 per barrel, while the US WTI crude futures increased 31 cents and traded at $37.47 per barrel.
Data released by the US Energy Information Administration (EIA) revealed that in the week to 4 December crude inventories slipped 3.6 million barrels, which is against analysts’ expectations of an increase of 252,000.
The EIA data highlighted an increase in the US distillate stockpiles by five million barrels.
It further estimated that total crude oil production in November fell by around 60,000b/d in the US compared with October.
Production is expected to fall through the third quarter of 2016 before predicted growth starts again in late-2016.
Despite the fall in US inventories, the oversupply concerns remain as the Organization of the Petroleum Exporting Countries (OPEC) could not reach an agreement on production cuts.
This led to fears that increased production from Iran and elsewhere may further deepen oversupply further.
CMC Markets chief market strategist Michael Hewson told the news agency that there is a chance that Brent will slip below its low since 2008 at around $38 per barrel.
However, there were signs of increasing demand from China, the world’s second-biggest oil user.
The China Association of Automobile Manufacturers noted an increase in vehicle sales by 20% in November, compared with the corresponding month in the previous year.