Oil prices to continue rising today — Bloomberg system expectations

Additionally, U.S. government data this week showed crude output last December fell for a third straight month by 43,000 barrels per day (bpd) to 9.26 million bpd, its lowest in a year. The U.S. Energy Information Administration will issue official inventory data on Wednesday.

As of last week, total USA crude inventories stood at 507.6 million barrels, a fresh weekly high.

While U.S. shale producers have demonstrated surprising resiliency by drilling at near maximum efficiency, falling rig counts typically provide lagging signals of imminent declines in output.

In an interview Monday with CNBC, Nigeria’s oil minister, Emmanuel Ibe Kachikwu, said the chances of a successful production freeze agreement are “very high”.

Brent crude was trading at 36.65 dollars per barrel, down 0.43 percent, on Wednesday, a level last seen in early January.

The global benchmark, Brent, is trading up 0.33 per cent at $US36.69 a barrel for May deliveries, while its U.S. counterpart, West Texas Intermediate, is up by 0.95 per cent at $US34.06 a barrel for deliveries in April. “There is still a lot of downside risk… but the USA crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels”, said Richard Gorry, director of JBC Energy Asia. When OPEC convenes in Vienna for its semi-annual meeting, it is unlikely that the world’s largest oil cartel will complete any drastic steps to cut production, according to OPEC sources and delegates surveyed by Reuters.

“The price action in oil adds to the case that the bottom in the crude oil market is now in place”. Equity markets and oil have mostly traded in tandem for weeks now.

China’s factories shed jobs at the fastest rate in seven years in February as activity shrank to five-month lows, a private survey showed, raising doubts about the government’s ability to reduce industry overcapacity this year without triggering a sharp jump in unemployment.