Brent oil prices edged up on Monday and were set to rise for five out of seven sessions as a global supply glut appears to ease, but rising U.S. production limited gains.
Brent crude was up 0.04 percent at $56.01 a barrel, while U.S. West Texas Intermediate was unchanged at $53.99 a barrel.
Oil prices tumbled on Friday after U.S. Energy Information Administration data showed U.S. crude inventories rose for a seventh straight week.
But the market has been supported within a tight $4 to $5 range since November, when the Organisation of the Petroleum Exporting Countries (OPEC) and other producers agreed to cut production.
“EIA data showed stocks rose 564,000 barrels to 518.7 million last week,” ANZ said in a note.
“However, it was the lowest increase over the past couple of months. If this trend of lower imports and smaller gains in inventories persists over the coming weeks, it would suggest that the OPEC led production cuts are starting to have an impact.”
OPEC’s record compliance with the deal has surprised the market, and the biggest laggards, the United Arab Emirates and Iraq, have pledged to catch up with their targets.
The International Energy Agency put OPEC’s average compliance at a record 90 percent in January, and based on a Reuters average of production surveys, it stands at 88 percent.
Saudi Arabia has offered to reduce oil production if rival Iran caps its own output this year, four sources familiar with the discussions told Reuters, as Riyadh tries to strike an elusive OPEC deal to curtail supply and boost prices.