Oil prices have continued to post gains, increasing by more than 1% due to expectations of OPEC-led output cuts to reduce a supply glut.
Production cuts enforced by the Canadian province of Alberta have also contributed to the rise in prices.
Brent crude oil futures LCOc1 rose 70 cents, or 1.1%, to reach $62.39 a barrel, while US West Texas Intermediate (WTI) crude futures CLc1 jumped by 58 cents, or 1.1%, to stand at $53.53, Reuters reported.
The gains continue to chart an upward growth for both crude benchmarks, which increased by 4% in the previous session after the US and China reached a truce agreement over their trade war. The pact would give the countries around 90 days to resolve their differences.
At a meeting in Vienna, Austria, later this week, OPEC members and Russia are expected to discuss production cuts.
Phillip Futures analyst Benjamin Lu was quoted by the news agency as saying: “Oil prices look likely to move up gradually this week as investors anticipate supply cuts by OPEC.”
Goldman Sachs said in a note to clients: “A cut in OPEC and Russia production of 1.3 million barrels per day (Mbpd) will be required to reverse the ongoing counter-seasonally large increase in inventories.”
The bank further stated that it expects OPEC and Russia to jointly withhold supply to ensure Brent oil prices rise above the mid-$60 per barrel mark.
However, OPEC’s efforts are being challenged by rising production in the US, where output stands at more than 11.5Mbpd C-OUT-T-EIA. The US output growth represents an increase of around 2Mbpd in a year.
Prices were also supported by an order issued by the Alberta government to reduce production by 325,000bpd to address excess crude in storage.