Crude oil price on Tuesday hit high for the month of March, finding support from concerns over tensions between Iran and Saudi Arabia, and about Venezuela crude production.
April West Texas Intermediate (WTI) crude rose by $1.20, or 1.9 per cent, to $62.26 a barrel on the New York Mercantile Exchange.
The global benchmark, Brent crude gained $1.22, or 1.9 per cent, to $67.27 a barrel with both WTI and Brent trading at their highest levels since late February.
Venezuela’s February output was down by more than half a million barrels compared with a year ago, according to International Energy Agency data last week.
The declines come on the heels of a deep economic crisis in the country.
However, the shortfall in the current Venezuelan production is being made up by record United States output and its inventories are expected to rise again this week.
The Energy Information Administration will issue its weekly update on US petroleum supplies today.
Analysts said tensions between Saudi Arabia and Iran, in addition to concerns over Venezuelan crude production, continued to underpin prices with the markets recovering soundly.
They have also pointed out that Iran nuclear tensions are not leaving the picture anytime soon, and the possible re-imposition of US oil sanctions should keep the oil bulls charging near term.
The possibility that the US could renew sanctions on Iran would hamper output from the country.
President Donald Trump reportedly told European leaders they must “fix the terrible flaws” in the Iran nuclear deal or the US would refuse to extend its sanctions relief on the country.
Investors will also be watching for news stemming from Saudi Crown Prince Mohammed bin Salman’s visit to the US this week.
Oil prices rose steeply last Friday after he said Saudi Arabia would develop nuclear weapons if Iran did.
Oil has been trading in a tight range this month, with WTI prices hovering around $60 a barrel as rising US output continues to stoke fears that a shale boom will limit price increases.
Crude oil prices were very volatile within a range, as concerns about rising supply from the US and elsewhere threatened to undermine efforts by OPEC and other producers to tighten the market.
Several reports last week renewed investor focus on potential for rising supply to overwhelm the expected gains in crude demand for 2018.
US crude inventories climbed for second consecutive week amid weakening oil demand as well as refinery utilisation rates and improving shale output.
Also, News of Libya said loadings of crude oil at a key port had been suspended, offsetting an earlier dent to the price caused by evidence of the inexorable growth in US oil output supported prices.
Data from Baker Hughes showed that the number of drilling rigs operating in the US rose by four last week, bringing the total count to 800. It was the seventh increase in the rig count in eight weeks.
International Energy Agency (IEA) reported global oil supply increased in February by 700,000 barrels a day from a year ago to 97.9 million barrels a day.