Crude oil prices climbed for a fifth session in a row to hit $58 yesterday, rallying from last December 2018's 18-month low, thanks to the production cuts by the Organisation of Petroleum Exporting Countries (OPEC) and more stable equity markets.
Oil has gained nearly 12 per cent since last Monday, its biggest week-on-week rally since early December 2016.
While the global benchmark, Brent crude oil was up $1 at $58.06 per barrel, having touched a session high of $58.90, the United States crude was up 88 cents at $48.84 a barrel.
The oil prices are drawing support from an agreed supply cut by OPEC, as well as some non-member countries such as Russia and Oman.
OPEC oil supply fell in December 2018 by 460,000 barrels per day (bpd) to 32.68 million bpd, a Reuters survey found last week, led by cuts from top exporter Saudi Arabia.
Before the current swing in oil prices, President Donald Trump had taken the credit for driving down oil prices, saying the drop amounted to a tax cut for Americans.
"People see that gasoline (petrol) is way down and the reason it's way down is because I called up some of the OPEC people," Trump had reportedly told reporters.
"I made calls, I said you better let that oil, that gasoline flow, and they did," he added
However, despite Trump's intervention, oil has gained nearly 12 per cent since last Monday, its biggest week-on-week rally since early December 2016.
OPEC, led by Saudi Arabia, alongside other producers led by Russia, agreed last year to rein in supplies starting from January after oil tumbled from above $86 on worries about surging output.
Before OPEC and other producers took a decision to lower output, Trump had made it clear that he did not want oil prices to rise.
Many analysts had thought Saudi Arabia was coming under US pressure to resist calls from other OPEC members for lower crude output.
Trump had praised Saudi Arabia for helping to lower oil prices as pressure intensified to impose tougher sanctions on the Middle East ally, following the murder of Saudi journalist, Jamal Khashoggi.
Trump had in a tweet thanked Riyadh for the drop and called for prices to go even lower, likening it to "a big tax cut" that could boost the United States and global economies. The aim of the OPEC cuts is to rein in a surge in global supply, driven mostly by the United States, where daily oil production grew by nearly a fifth to over 11 million bpd in 2018.
Record high crude oil production has also pushed up United States inventories, which rose by nearly 17 per cent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday.
According to agency reports, more upbeat equity markets also offered support. Shares have risen on expectations that trade talks this week between the United States and China will ease a trade dispute.
Disruptions to trade undermine prospects for economic growth and oil demand.
Goldman Sachs said in a note it had downgraded its average Brent crude oil forecast for 2019 to $62.50 a barrel from $70 due to "the strongest macro headwinds since 2015".
Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for U.S. light crude by $9 to $57 a barrel.