West Texas Intermediate (WTI) crude futures traded in a 38-cent range on either side of Monday’s close, and last traded up 38 cents at $35.91 a barrel.
Brent crude futures rose 1.09%, or 42 cents, to $38.96 a barrel.
Brent has doubled over the past six weeks, thanks to supply cuts by the Organization of the Petroleum Exporting Countries and allies, including Russia, a grouping dubbed OPEC+.
Both Brent and WTI prices are still down about 40% for the year so far.
“The whole story is very much based around the supply cuts and the demand recovery,” said Commonwealth Bank commodities analyst Vivek Dhar.
OPEC+ producers are considering extending their output cut of 9.7 million barrels per day (bpd), about 10% of global production, into July or August, at an online meeting likely to be held on June 4.
Under the OPEC+ plan agreed in April, the record supply cut was to be for May and June, scaling back to a cut of 7.7 million bpd from July through December. Saudi Arabia has been leading talks to push for extending the heftier cuts, sources told Reuters last week.
An agreement to extend the larger cut could push oil prices to $40, but the market would need to see follow-through on that commitment to sustain higher prices, Dhar said.
A drop in crude stockpiles at Cushing, Oklahoma, which fell to 54.3 million barrels in the week to May 29, also buoyed prices, traders said, citing a Genscape report on Monday.
Citi’s head of commodities research Edward Morse pointed out, though, that while Cushing stocks have fallen, coastal inventories continue to rise.
“There are legitimate concerns that the bullish market signals that built up steam over the course of last month might be based on misleading and temporary factors,” Morse said.
Trade tension between China and the United States over Beijing’s security clampdown in Hong Kong, as well as manufacturing data on Monday showing Asian and European factories struggling, has kept a lid on gains.